A new prescription is written out for Mechel: state-owned banks to save the company

Kommersant reports that the Russian state-owned banks, on which two-thirds of Mechel’s loans fall (the net debt is $8.3 billion), in the fulfillment of the President Vladimir Putin’s order, have developed a new scheme to support the company. Gazprombank, VTB and Sberbank may allocate Mechel another 215 billion rubles, 180 billion rubles of which will be used to purchase additional issue or convertible bonds. The option, in which money will be provided as loans by VEB, which will receive the securities, is discussed. In the case of the additional issue the corporation can become the owner of almost 85% of Mechel’s shares, but analysts believe the placement of bonds is more likely.

The major lenders of Mechel have found a new opportunity for financial support, sources of the Kommersant, familiar with the situation, reported. The scheme provides for the allocation of a bridging lloan in the amount of 35 billion rubles to Mechel (tentatively in June), and then another 180 billion rubles, which will be used to purchase an additional issue or the company’s convertible bonds. It would repay most of the loans (the net debt by mid-May wa $ 8.3 billion). According to the Kommersant’s sources, close to the creditors, the likelihood of the scheme implementation is "very high".