Mechel, one of the leading Russian mining and steel groups, has signed a €30 million credit agreement with Erste Group and Banca Comerciala Romana (BCR) for the benefit of its Romanian subsidiaries Mechel Campia Turzii, Mechel Targoviste and Ductil Steel.
"This agreement will enable the mitigation of the economic crisis and will support a stable operation process for Mechel companies in Romania," Mechel's Eastern European Metallurgical Division CEO Victor Dyshlevich commented.
The multi-borrower loan type of agreement (where entities signing the agreement can make use of the financing line up to the overall established threshold) will finance working capital, with material collateral and letter of guarantee from the mother company, Mechel. The aforementioned €30 million will refinance a previous loan worth €15 million and provide an additional loan of €15 million.
"Steel production is an important driver for the economy, both in terms of contribution to exports and in terms of the employment, energy and raw materials consumption they generate domestically," Diana Hudymac, head of Group Large Corporate Clients at BCR, said.
Mechel's Romanian subsidiaries, namely, Mechel Targoviste, Mechel Repairs, Mechel Campia Turzii, Ductil Steel Buzau and Otelu Rosu, are part of the company's Eastern European Metallurgical Division. In 2009 these companies produced 750,000 mt of finished products, over €9 million were invested in the modernization and the restructuring of the enterprises, while the total number of employees in the five companies reached about 7,000 people.