Russian coal and steel producer Mechel (MTLR.MM), which was sanctioned by the United States just under a year ago, has agreed a new debt restructuring as low coal prices and high interest rates put pressure on its payment schedule.
Several Russian companies and lobby groups have complained about prohibitively high interest rates, which ended the year at 21%. The central bank, which blames stalling investment on widespread labour shortages, has borne the brunt of the criticism.
Mechel said on Tuesday it would postpone 2025-26 payments on part of its principal debt to 2027-30, which a company representative said would ease the burden on its cash flow and ensure financing for its current activities.
The company's largest creditors, state-owned banks VTB (VTBR.MM) and Gazprombank (GZPRI.MM), declined to comment.
Russian coal miners are struggling with declining global prices, Western sanctions and infrastructure problems.
Mechel, owned by businessman Igor Zyuzin and his family, has restructured its debt before, selling its flagship asset, the Elginskiy mine, in 2020 and postponing debt repayments for seven years, with the possibility of a three-year extension.
The new restructuring raises the amount Mechel will have to pay from 2027-30.
At the end of the first half of last year, Mechel's net debt, excluding penalties and fines, had risen 5% from the start of the year to 262.5 billion roubles.
BCS analysts said high rates and low coal prices made it hard for Mechel to pay debt, so the restructuring would likely maintain the company's financial stability.
