Steel giant Mechel appeals ruling ordering it to pay VTB Bank about $1 billion
MOSCOW, May 18 (RAPSI) - The Moscow Commercial Court has registered an appeal filed by Russian integrated mining and steel company Mechel challenging an April ruling that orders it to pay VTB Bank 50.2 billion rubles (about $1 billion) in overdue debt, according to court records.
On April 9, the Moscow Commercial Court upheld a VTB lawsuit for early payment of the loan after steel producer Mechel ceased servicing the loan in March 2014.
The court ordered Mechel to pay over 44.5 bln rubles ($0.9 bln) of the principle, and 3.2 bln rubles ($64.8 mln) in interest, plus late payment penalties of 1.9 bln rubles ($38.5 mln) on the principle and 557 mln rubles ($11.2 mln) on the interest.
In early March, VTB announced that it would file a claim for the court to declare Mechel bankrupt. However, the bank has yet to take this step.
Meanwhile, VTB President Andrei Kostin said on April 6 that Mechel was ready to pay off the debt and confirmed that negotiations with the company had occurred.
Mechel is embroiled in billions of rubles worth of debt. Sberbank, VTB Bank and Gazprombank are among its major creditors. It has been negotiating debt restructuring for some time, so far unsuccessfully.
Six suits were brought by state-run Sberbank against Mechel companies last October.
Industry Minister Denis Manturov said in March that Mechel cut its debt to $6.4 billion from $8.6 billion, according to RIA Novosti. About 40 percent of Mechel’s debt is in rubles.