The Russian steel and mining group Mechel has announced that it has entered into an agreement with a banking syndicate to extend for two months the repayment of a $1.5 billion one-year loan, which was secured for the acquisition of London-based nickel and chrome mining and processing company Oriel Resources Plc. The new payment date is May 15, 2009.
Accordingly, Mechel is to use the extension period to complete negotiations with the banks participating in the syndicate aimed at refinancing the bridge loan with long-term instruments.
Mechel received the $1.5 billion bridge-loan to purchase Oriel in May 2008. The loan's bookrunners are Royal Bank of Scotland and Merrill Lynch.
As SteelOrbis previously reported, at the end of March 2008 Mechel agreed to pay $2.1986 per each Oriel share, amounting to a total consideration of $1.498 billion for a 100 percent stake in Oriel.