Mechel failed to gain a quorum to vote on debt restructuring.

MOSCOW, March 4. Mechel failed to gain the necessary quorum of 50% of the votes of minority shareholders to vote on the question of debt restructuring, announced this data at a special meeting of shareholders of the company by the Registrar.

This happened due to the fact that there was legal difficulties with the vote of the holders of ADRs which constitute the majority of the minority shareholders, explained the General Director Oleg Korzhov.

“Now the company will convene a new meeting of shareholders and to convince people,” said Korzhov. Earlier it was informed that the plan of debt restructuring “Mechel” has supported about 80-85% of the Russian minority shareholders of the company.

On the background of this information, shares of “Mechel” on the Moscow stock exchange has fallen by 21%.

The terms of restructuring

In early February, “Mechel” has published the terms of agreements with creditor banks. According to the agreement, Mechel’s total debt which is $6.2 billion, may defer the repayment of the most part of loans from 2017 to 2020.

The Board of Directors of “Mechel” recommended to the General meeting of shareholders to approve transactions for the provision or alteration of the guarantees and mortgages provided by the company addressed to the lenders – Sberbank, Gazprombank, VTB Bank and a syndicate of banks, as they correspond to the interests of the company.

Under current law, such transactions can be approved only if they receive more than half of minority shareholders.

The total amount of the restructured debt of “Mechel” of $5.1 billion or 80% of the total debt and includes only the major creditors of the company – Sberbank ($1,267 billion), Gazprombank ($1,793 billion), VTB ($1,068 billion) and a syndicate of international banks ($1,004 billion).