VLADIVOSTOK, Russia (Reuters) - The head of Russian bank VTB (VTBR.MM) said on Wednesday the lender would discuss a debt restructuring request from Mechel (MTLR.MM) with the mining group’s other creditors, Sberbank (SBER.MM) and Gazprombank (GZPRI.MM).
The coal-to-steel group, controlled by Russian businessman Igor Zyuzin, has asked its creditors to push back its debt repayments to 2024-2026, after earlier agreeing a deal to postpone repayments to 2020-2022.
“No one intends to harass Mechel,” VTB boss Andrey Kostin told reporters on the sidelines of an economic forum in the city of Vladivostok in Russia’s Far East, after saying the bank had received and would consider Mechel’s request.
Shares in Mechel rose 4% in Moscow, outperforming a broader index .IMOEX up 1%, but are still down 15% since the start of 2019.
Mechel, which borrowed heavily during the commodities boom in the 2000s, has undergone several debt restructurings in the past ten years, amid weaker coal prices.
The company is now awaiting a decision on the postponement of its debt repayments, after finding that its current cash flow was not sufficient to fulfill all of its repayment obligations in 2020-2022.
Mechel’s shareholders have kept a keen eye on the wording Russian officials use about the company since 2008, when a remark by President Vladimir Putin sent share prices plummeting.
Putin’s comment suggested “sending a doctor” to Zyuzin “to clear up all these problems”, after the Mechel co-owner blamed ill health for missing a Kremlin meeting.
Reporting by Vladimir Soldatkin and Gabrielle Tétrault-Farber; Writing by Polina Ivanova; Editing by Jason Neely and Mark Potter