In July 2009 Mechel announced that electric furnace No 1 at Tikhvin Ferroalloy Smelting Plant has been commissioned. JSC “TFZ” is a subsidiary of Oriel Resources Ltd. Electric furnace No. 1 that has been commissioned at JSC “TFZ” became the last of the four units at the plant put into continuously operating regime. Thus, Mechel increases its output of high quality ferrochrome, an alloy required to produce stainless and special steels.
In July 2009 Mechel announced successful closing of the deal for refinancing its short-term credit facilities totaling USD 2.6 billion raised to purchase assets in Yakutia and Oriel Resources Ltd. Mechel has become the first Russian company which managed to refinance its significant credit facilities with foreign banks by means of long-term instruments and, moreover, it was done on acceptable and favorable terms.
In July 2009 Mechel announced that it has competed placement of its non convertible, interest bearing, certificated bearer bonds of 04 series for RUB 5.0 billion. The placement was arranged by public offering in the form of tender on the coupon rate and complied with the terms and procedure provided for in the Resolution on the securities issue and Prospectus. The total quantity of the placed securities was 5,000,000 bonds with the nominal value of RUR 1,000.00 each. The first coupon rate was established at 19% p.a.
In August 2009 Mechel announced the Memorandum of Cooperation signing with Mitsui & Co. Corporation. In this connection the parties are planning to realize cooperation in different directions, among which marketing and sale of metal production and resources, including coal, all types of ferroalloys, pig iron, billet and other types of iron and steel products. Joint investment projects are also planned, among which organization of joint ventures in the sphere of primary goods production, production of ferrous and non-ferrous metallurgy, sales and distribution.
In August 2009 Mechel announced establishing its official representative office in Seoul, the Republic of Korea. Currently Mechel representative office in the Republic of Korea is the first Russian corporate representative office in the mining and metals industry in the country. The representative office of the company will support Mechel’s business in the Republic of Korea, interact directly with South Korean partners, promote establishing new business contacts and assist in broadening Mechel’s activities in South Korea.
In September 2009 Mechel announced commissioning of the new production line for cold deformed reinforcement wire at its Beloretsk Metallurgical plant subsidiary. New set of equipment from GCR company, Italy with annual capacity of 36 000 tonnes allows Beloretsk Metallurgical Plant to start production of a brand new class of products reinforcing wire with 4mm to 12mm diameter used for construction.
In October 2009 Mechel announced establishing its official representative office in Tokyo, Japan. The representative office of the company will support Mechel’s business in Japan, including conducting market researches, arranging meeting with partners and searching for new ones, advertising the Group’s products, and performing representative functions.
In October Mechel announced that it has completed placement of non-convertible interest-bearing documentary bonds of 05 series with total value of RUR 5 billion. Placement was performed by public subscription under the terms and conditions of Securities Prospectus and Decision on Securities Issuance through collection of purchasers’ applications for fixed-price purchase of bonds with coupon rate for the first coupon period. Securities offered in the amount of 5 million, nominal value of each bond being 1 000 rubles. Coupon rate for the first coupon period set at 12.5% per annum.
Mr Igor Zyuzin CEO of Mechel said “Generally the first half of 2009 was the most challenging period for Mechel during the crisis. Significant efforts were required to adopt the company to deteriorated global economy, to protect the production from shutdowns and then to restore it to pre-crisis levels as promptly as possible. Nevertheless, we succeeded not just to save our business but we also found new sources and methods of costs cutting and productivity enhancement became more active and flexible in sales, approached new geographical markets, optimized logistics. It was illustrated by the fact that Mechel has become the first Russian industrial company which managed to refinance its debt portfolio with international banks syndicate and thus has secured company's stability and further development capability. And that is why today the company is able to fully benefit from current economy stabilization and to increase its shareholder value.”
