MECHEL REPORTS SIGNING A US$471.2 MLN FACILITY TO FINANCE CONSTRUCTION OF THE
UNIVERSAL ROLLING MILL AT ITS CHELYABINSK METALLURGICAL PLANT SUBSIDIARY
Moscow, Russia – September 20, 2010 – Mechel OAO (NYSE: MTL), one of the leading
Russian mining and metals companies, announces it has signed a loan agreement to
finance a universal rolling mill installation project at its Chelyabinsk
Metallurgical Plant OAO (CMP OAO) subsidiary.
The new $471.2 million* Senior Term Loan facility, entirely fronted by BNP
Paribas S.A.,  consists of three tranches underwritten by BNP Paribas S.A., GPB
(OJSC) and UniCredit Corporate Banking S.p.A.  GPB (OJSC)’s tranche is $219.4
million, BNP Paribas S.A.’s tranche is €102.8 million, UniCredit Corporate
Banking S.p.A.’s tranche is €89.2 million. The disbursement period under all
three tranches is 30 months starting from the date of signing of the credit
facility agreement. The repayment will be done by equal semi-annual installments
starting at the end of the disbursement period spreading over 6 years for the
first tranche and 7.5 years for the second and the third tranches. The credit
facility benefits from insurance coverage of the Italian, German and Chinese
export credit agencies – respectively Sace, Euler Hermes and Sinosure.
The purpose of the facility is to finance payments under two contracts: the
equipment and technology supply contract signed with Danieli & C. Officine
Meccaniche S.p.A. and the general construction contract with MinMetals
Engineering Co., Ltd.
Stanislav Ploshchenko, Mechel’s Chief Financial Officer commented: “Only a week
after the successful refinancing of the 2 billion dollars of foreign debt we
signed another landmark loan agreement, which secures financing for our biggest
investment project in the steel division, ensuring its timely execution. This
agreement is unique not only in its long tenor but also in the number and
quality of its participants representing both foreign and Russian banks as well
as 3 national export credit agencies. This marks the level of confidence in our
Group and the investment projects we are carrying out. The universal rolling
mill is a strategic project for our Group and for the infrastructure development
in Russia. When it is installed it will primarily manufacture high quality
railroad rails up to 100 meters in length using state-of-the-art rolling
technology. This product along with high quality structural shapes will
dramatically improve the efficiency at CMP and of the entire steel division of
our Group.”
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* A part of credit facilities is arranged in Euro. The total sum in US dollars
is calculated in accordance with the cross-rate of CB RF as of September 20,
2010 (€1=$1.311).
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Mechel OAO
Ekaterina Videman
Tel: + 7 495 221 88 88
ekaterina.videman@mechel.com
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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, steel, ferrochrome, ferrosilicon, rolled products,
hardware, heat and electric power. Mechel products are marketed domestically and
internationally.
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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.