The company’s debt in Russian rubles are converted into dollars, thanks to this debt decreased by 30% over the past year, said the owner of the company Igor Zyuzin.
MOSCOW, 29 Oct. “Mechel” has improved relations with creditors and was able to reduce its debt burden due to devaluation of the ruble, said principal owner of the company Igor Zyuzin.
“I think that relationship has improved. We work constructively with the banks. Basically it is a three state banks — Sberbank, VTB, Gazprombank and the syndicate of foreign banks. We are working with them on months-long negotiations and gradually move to a joint decision,” said Zyuzin in an interview with TV channel “Russia 24”.
He also noted that the devaluation of the ruble seriously helps the company in reducing the debt burden. “Since we have 40% of debt was denominated in roubles, the devaluation, inflation reduces our debt in Russian rubles, converted into us dollars, because as per US GAAP debt is calculated in us dollars. According to our estimates, 20-30%, we reduced debt in terms of foreign currency in the last, say, year”, — he explained.
According to Zyuzin, a large debt load stems from the fact that the company invested heavily in new production, also made several acquisitions, which in conditions of stagnation of the markets ceased to pay off. This applies mainly to foreign assets. Currently the company focuses on the development of Russian industrial enterprises.
In 2014 there was a provision when interest payments exceed the income of “Mechel”. However, according to Zyuzin, the performance of the first half of 2015 show that the company may be able to reverse this situation.
“Mechel” in the first half increased coal production by 2%, steel production — by 1% and expects growth in the future. “If you touch the coal, then Yes, we hope to increase production, but we have several investment projects, which we developed last years and reached the payback period. Therefore, we significantly increase production and economic indicators,” said Zyuzin.