On Thursday, the interest payments of loans granted by Russia’s top bank Sberbank, VTB Bank and Gazprombank to Mechel came due, but the payments were never made.
The banks have demanded the company convert debt into shares, decreasing a 67.42% stake of Igor Zyuzin, the board of directors’ chairman, to minority and changing the company’s management board.
Mechel’s net debt stands at $8.3 billion, including a $2.3 billion debt to Gazprombank, $1.8 billion to VTB and $1.3 billion to Sberbank. The company has been in debt restructuring talks for six months.
VTB is not satisfied with the company’s restructuring plan as “the current debt burden is beyond (Mechel’s) strength,” VTB CEO Anrei Kostin told daily Izvestia.
The non-payment to VTM may be regarded as the first stem to Mechel’s bankruptcy, according to Izvestia.
Mechel’s shares fell by 13% at Friday’s opening, the Moscow Exchange’s data showed.