MTL Mechel PAO

By Lukas I. Alpert

MOSCOW--Russian coal and steel group OAO Mechel (MTL) said Monday it has signed a long-term agreement to open four credit lines worth 24 billion rubles ($774 million) to a production subsidiary of its mining unit.

The credit lines to Southern Kuzbass Coal Co. (UKUZ.RS) in Russia's Kemerovo Region were opened by Sberbank (SBER.RS) for five years, with a three-year grace period, Mechel said. They were guaranteed by Yakutugol Holding Company, Mechel Mining and OAO Mechel.

"The loaned funds will be used exclusively for refinancing the group's short-term debt, thus becoming an important step in implementing our strategy of extending the maturity of our debt portfolio," said Mechel OAO's Chief Financial Officer Stanislav Ploschenko.

Mechel OAO reported debt of $8.8 billion as of June 30.

Write to Lukas I. Alpert at lukas.alpert@dowjones.com

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