Dallas, Texas 03/24/2014 (FINANCIALSTRENDS) – Mechel OAO (ADR) (NYSE:MTL) one of the topmost Russian mining & metals companies, announced that the project company Elgaugol OOO, that is part of the Mechel Group, & the State Corporation “Bank for Development & Foreign Economic Affairs have signed agreements for the 2nd & 3rd credit-lines of project financing for the development of the Elga Coal Complex’s 1st phase, for 2.085B US dollars & 418.7 million United States dollars respectively. The 2nd credit line, that is totaling 2.085B US dollars, will now be used to finance the construction of the Elga Coal Complex’s facilities until its coal mining 7 processing capacity touches 11.7 million tons of run-of-mine coal/ year, and the completion of works that are aimed at upping the capacity of the Ulak-Elga railway.
The 3rd credit-line that totals 418.7M US dollars will now be used to fund the expenses on paying the Vnesheconombank’s interest & fees for the 2nd credit-line until the Elga Coal Complex’s 1st -phase facilities are all launched, and to repay the $ 150M bridge loan, the 1st credit-line that granted Elgaugol the OOO in Oct 2013.Also, 49 percent of the shares of Elgaugol OOO’s, and the company’s movable & real-property will be offered as a security on the credit lines. Vnesheconombank will also be acquiring 0.01% of Elgaugol OOO’s equity-capital.
Vnesheconombank’s Supervisory Board has approved this agreement that grants Mechel OAO (ADR) (NYSE:MTL) project-financing that totals 2.5B US dollars in Sep 2013. This loan has a 13.5 years tenor. Stanislav Ploschenko, Mechel OAO (ADR) (NYSE:MTL)’s Chief Financing Officer said that they highly-value their cooperation with Vnesheconombank, that lends support to their company in a very volatile period for the industry & the global financial -market. Thanks to the loan they have now fully resolved the financing issue for this Elga project that will be developed irrespective of the volatility in commodity-markets.