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Mendel OJSC CEO: the results of production were affected by debt servicing
General Director of Mechel OAO Oleg Korzhovcommenting results of production and sales of products for 2014, noted that significant funds allocated for servicing debt obligations affected, in particular, the establishment of conditions for a minimum price level for basic products, a lack of working capital and a total cost reduction, Mechel's press service reports.
“Last year, the Mechel Group companies operated under conditions of a minimum level of prices for main products, a lack of working capital and a total cost reduction, since significant funds were spent on servicing debt obligations”, - said Korzhov.
At the end of 2014, the leading Russian mining and metallurgical company reduced coal production by 18% compared to 2013 - to 22,624 million tons, steel production decreased by 8% - to 4,269 million tons. In the fourth quarter of 2014, coal production fell by 3% compared to the previous quarter, to 5,617 million tonnes, while steel production increased by 3%, to 1,087 million tonnes.
As Korzhov notes, despite the difficult situation, "In the mining segment, we began to restore production indicators, which fell after the production shutdown at Mechel Bluestone, due to increased production at the Elginskoye field. We improved the system for planning the production and marketing of steel products, and also increased our own production of products with high added value, while reducing the sale of third-party products. "
He also added that negotiations with banks about the restructuring of accounts payable continue, the company expects to complete them in the near future.
The fact that VTB will file a new lawsuit against Mechel, Izvestia writes today. This time it is a question of recovering from the mining and metallurgical company debt on a loan of about 2,6 billion rubles. About it "Izvestia" said a source familiar with the situation. According to the source, the claim will be filed with the Moscow Arbitration Court 28 April. "VTB will continue to sue the company. Simultaneously, the bank is in talks with Mechel, which began to pay off overdue interest, but has not paid the entire amount, "the source said.