Support The Moscow Times!

Sberbank to File Bankruptcy Claims Against Mechel Subsidiaries – Bank Official

The miner said it hoped to solve its dispute with Sberbank out of court, as it did with VTB bank and Gazprombank in June.

Russian state lender Sberbank intends to begin bankruptcy proceedings against three subsidiaries of indebted miner Mechel, a bank official said on Wednesday.

After months of discussions with lenders and government officials to restructure its $6.6 billion net debt, Mechel has reached agreements with all of its creditors except Sberbank, Russia's largest bank by assets.

Maxim Degtyarev, head of the Distressed Assets Department at Sberbank, said the bank would file bankruptcy claims against Mechel's Yakutugol and Chelyabinsk metal factories and its Bratsk Ferroalloy Plant.

"Today we filed a notice of intent to appeal to the Arbitration Court to declare these companies bankrupt — we will have the right to [appeal] in 15 days," he told Reuters.

Mechel, controlled by businessman Igor Zyuzin, borrowed heavily before Russia's economic downturn, deepened by Western sanctions over the Ukraine crisis and a collapse in global oil prices, the country's main export commodity.

The miner said it hoped to solve its dispute with Sberbank out of court, as it did with VTB bank and Gazprombank in June.

"Mechel urges [Sberbank] to refrain from hasty actions that could damage these profitable operations which employ more than 22,000 people," the company said in an e-mailed statement.

"Halting operations or disrupting the supply chain does not improve the company's solvency," it said.

Read more

We need your help now more than ever.

Independent media outlets and journalists in Russia are being increasingly targeted with “foreign agent” and “undesirable” labels, threatening the existence of the free press day by day.

Your donation to The Moscow Times directly supports the last independent English-language news source within Russia.