Russia’s Mechel holders approve plans to restructure two bond series

By Susanna Moon

Chicago, Sept. 18 – Mechel OAO said bondholders approved by absentee ballot the plans to restructure its 13 and 14 series bonds, according to a 6-K filing with the Securities and Exchange Commission.

Of the votes cast, 82% of holders of the 13th bond series and 79% of holders of the 14th bond series approved the measures.

Under the restructuring terms, the principal amount will be partly repaid during the four years at the dates set for the end of 13-19 coupon periods.

Interest will be calculated as a simple average between the Bank of Russia’s key rate plus 400 basis points and the fixed coupon for each year.

The company said that 10% of the bonds will be bought back as part of the offer on Sept. 28. Another 10% will be bought back by the issuer as part of the offer within a year – with 5% on March 1 and another 5% on Aug. 30, 2016.

VTB Capital AO is the company’s agent for the bond restructuring. Legal Capital Investor Services will run the restructuring as an approved bondholders’ representative.

The company said on Sept. 2 that it planned to introduce changes in the payment schedule and to reconsider the order of determining the coupon rate for future periods.

The two bond series were issued on Aug. 10, 2010.

Mechel is a Moscow-based mining, metals and power company.

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