Updated 09:09 a.m. Moscow time
MOSCOW, October 2 (RIA Novosti) – Russian metals giant Mechel’s general director told RIA Novosti in an interview Thursday that foreign banks are prepared to consider restructuring the company’s debt but are waiting for a decision from Russia’s main creditors.
"Foreign banks have taken a ‘waiting position’ and will see how the main creditors will act and then make a decision from that," Mechel General Director Oleg Korzhov said.
He said that Mechel had already received a letter from foreign creditors of the risk of the company falling under western sanctions if 50 percent of the company’s stocks are handed over to Russian state banks.
According to Korzhov, Mechel has approximately $1.7 billion in debt to foreign banks and one creditor must be paid $1 billion already in December.
"Foreign banks have confirmed their readiness to consider a reconstruction, but if Mechel falls under sanctions, then they will be prohibited to do this," Korzhov said.
Korzhov said that it is possible that Mechel does fall under western sanctions.
"Currently all three [Russian] state banks are already under [western] sanctions so if in total they receive more than 50 percent of the stocks of any company, then sanctions are expanded to include that company automatically. We have already received an according letter of information from our foreign creditors with a warning of this type of risk appearing," Korzhov said.
In 2013, Mechel sought to sell its US asset, coal mining complex Bluestone, acquired in 2009 in attempts to handle its debt. US investment bank JP Morgan was hired to assess the company's options with respect to Bluestone.
The same year, the company's employees experienced delays in receiving their salaries, as Mechel struggled to manage its debt, which is estimated to be $5.1 billion as of 2014.
Mechel was founded in 2003 and has production facilities in 11 Russian regions. It also has operations in the United States, Ukraine and Lithuania, according to the company's website. Mechel produces coal, iron ore, steel, rolled products, ferroalloys, heat and electric power. The company consists of more than 20 production facilities and has 72,000 staff.