Interview with the CEO of Mechel on its debt restructuring!

Mechel is ready for various scenarios of its debt restructuring but the scheme with VEB’s bonds mostly appeals to the company. VEB will postpone the payment for 10-15 years, CEO of Mechel O. Korzhov says. In his interview with RBC he spoke about the banks that don’t participate in the negotiations on restructuring, the assets the company is ready to sell and whether creditors ask I. Zyuzin to quit.

Question (Q): The Government has decided not to make the company bankrupt and the most probable variant is the emission of euro bonds. What consequences for Mechel this might lead to?

Answer (A): For Mechel this is the most appealing variant by a number of reasons. First, it will allow us to restructure the part of the debt we have to pay in 2014, 2015 and 2016. The issue of these bonds will allow us to postpone the payment of a significant part of the debt: $8.3 bln and now the restructuring of another 180 bln roubles goes on. It will postpone a significant part of our debt for 10-15 years.

Second, in the framework of this restructuring we will be able to significantly cut the payment of interest by the bank loans that will give us an opportunity to have some free float. We save the vertically integrated company that keeps working and making money, form the operational profit.