December 22, 2017 / 4:33 PM / a year ago

UPDATE 1-Mechel gets backing from 70 pct of creditors to restructure $1bln loan- sources

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MOSCOW, Dec 22 (Reuters) - Metals and mining company Mechel has secured the backing of around 70 percent of creditors for a restructuring of its $1 billion syndicated loan, two sources familiar with the situation said.

This brings Mechel close to achieving the 75 percent support from creditors needed to reach the deal, one of the sources said.

The agreement was discussed with the company’s main lenders and a final proposal was circulated by the company on Monday this week, this source said.

Mechel declined to comment.

The company, controlled by businessman Igor Zyuzin, borrowed extensively during the commodities boom in the 2000s and faced a painful restructuring following the 2008 financial crisis exacerbated by Russia’s economic crisis in 2014.

Sberbank, VTB and Gazprombank - Russia’s three largest state-controlled banks - confirmed a restructuring of $5.1 billion of Mechel’s more than $6 billion debt in April 2017.

In late November this year, Mechel said a number of international holders of its $1 billion syndicated loan had sold their stakes and that the company was in negotiations with new creditors about a restructuring deal.

Higher coal and steel prices have supported the company in recent months, allowing it to report a net profit in the third quarter this year, having suffered losses in the same quarter the year before. (Reporting by Katya Golubkova and Diana Asonova; Writing by Polina Ivanova; Editing by Jane Merriman)

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