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Russia’s Mechel may pledge 38% in mining unit for VEB loan — source

July 21, 2014, 16:43 UTC+3 MOSCOW
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MOSCOW, July 21. /ITAR-TASS/. Russian metals and mining group Mechel, whose debt amounts to$8.3 billion, is ready to pledge 37.5% in Mechel-Mining to receive a 35 billion ruble bridge loan from Vnesheconombank (VEB), two sources close to Mechel’s financial support negotiations told PRIME on July 18.

“VEB is ready to consider 37.5% in Mechel-Mining as collateral for the loan,” one of the sources said. Sberbank and VTB, other creditors of the group, do not mind against this move, the other source said.

Mechel is seeking a 1-year bridge loan with an interest rate at 11% annually to repay its short-term debt, the sources said.

Mechel already pledged 37.5% in Mechel-Mining against VTB loans and 25% against Sberbank loans, which means that the group is ready to pledge 100% in Mechel-Mining for loans from state-run banks.

In July, VEB CEO Valery Dmitriyev said that the bank was not interested in buying Mechel’s convertible bonds or in granting loans to a consortium comprising assets of Mechel, Evraz and VEB’s rolled stock producer Amurmetal.

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