The court recovered $ 10.6 million from Mechel in favor of Sberbank

The Moscow Commercial Court ordered the mining and metallurgical company Mechel and three of its subsidiaries to pay Sberbank USD 10.6 million and RUB 6.8 million in arrears. As reported in http://madek.ua/, Sberbank of Russia filed a lawsuit to raise money under two loan agreements dated October 9, 2012 and two agreements on innovations on December 5, 2012 and March 4, 2013. The lawsuit was filed against Yuzhny Kuzbass and its guarantors Mechel, Mechel-Mining and Yakutugol Holding.

At the same time, the court dismissed the counterclaim, which was filed by Yuzhny Kuzbass. The coal company claims that it borrowed 5 billion rubles (100.4 million US dollars) and 7.9 billion rubles (about 160 million US dollars) from Sberbank, and that the novation agreement includes a provision, according to to which the borrower will repay the loan in US dollars if the dollar rate soars to 50 rubles, and not 30 rubles per dollar.

The bank demanded that the court recover the debt plus interest fines from Southern Kuzbass. Mechel argues that the innovations are invalid because the bank used its powers by shifting risk for the borrower without consideration, and that these agreements upset the balance of the parties and the interests of corporate partners, which also undermines the national currency. One of the guarantors said that due to these violations, the borrower's liabilities increased from 13 billion rubles ($ 261.1 million) to 21 billion rubles (about $ 422 million) almost overnight.

In Russia, Mechel is considered the most heavily leveraged company in the industry with a debt of $ 7.015 billion. The bulk of this debt falls on 3 banks, namely Sberbank, VTB and Gazprombank. Mechel agreed to restructure loans with VTB and Gazprombank, while Sberbank offered to sell the debt to external investors from Russia. Earlier it was reported that Sberbank intends to sell Mechel's debts at par, and this will be difficult to do, since the company's bonds are now traded at 57.3 half a cent of par.

The fact is that Mechel has no direct debt to Sberbank; subsidiaries such as Mechel Trading, Chelyabinsk Metallurgical Plant and Yuzhny Kuzbass owe it. These loans are pledged for 50 percent plus two shares of the Beloretsk Metallurgical Plant and Mechel Mining, as well as real estate and equipment of the Bratsk Ferroalloy Plant.