Mechel Announces Obtaining 130-Million-Dollar CreditMoscow, Russia — November 10, 2011 – Mechel OAO (NYSE: MTL), one of the leading Russian mining and metals companies, announces the signing of a long-term framework agreement with Sberbank of Russia on providing a loan to Mechel Trading AG.
Sberbank of Russia provides Mechel Trading AG with a framework credit line totaling 130 million US dollars for a period of three years and within its framework, separate credit lines carrying a 1-year tenor. Mechel OAO and Chelyabinsk Metallurgical Plant OAO act as guarantors of the facility.
“Mechel Group’s Russian enterprises have a good, strong relationship with our longstanding partner Sberbank of Russia. This credit line takes that relationship further and extends it to Mechel Group’s foreign subsidiaries. Despite the current volatility of financial markets, we managed to obtain financing on attractive terms, which demonstrates the quality of our partnership and the high level of the bank’s trust in the company. These funds will be used to finance Mechel Trading AG’s current operations, including pre-export financing,” Mechel OAO’s Chief Financial Officer Stanislav Ploschenko said.
“Over a long history of cooperation Sberbank of Russia and Mechel Group built strong partnership ties. The signed agreement on financing for Mechel Trading AG demonstrates our plans for developing long-term cooperation with Mechel Group both on the Russian and the foreign markets,” said Tatyana Sakharova, Sberbank of Russia’s Managing Director and Chief of Credit and Project Financing in the Corporate Clients Department.
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Mechel is one of the leading Russian companies. Its business includes four segments: mining, steel, ferroalloy and power. Mechel unites producers of coal, iron ore concentrate, nickel, ferrochrome, ferrosilicon, steel, rolled products, hardware, heat and electric power. Mechel products are marketed domestically and internationally.
Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Mechel, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend to update these statements. We refer you to the documents Mechel files from time to time with the U.S. Securities and Exchange Commission, including our Form 20-F. These documents contain and identify important factors, including those contained in the section captioned “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in our Form 20-F, that could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, the achievement of anticipated levels of profitability, growth, cost and synergy of our recent acquisitions, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the Russian economic, political and legal environment, volatility in stock markets or in the price of our shares or ADRs, financial risk management and the impact of general business and global economic conditions.