Russian Mechel posts $690.7 million loss in First Quarter

The Russian mining and steel operator Mechel, controlled by billionaire Igor Zyuzin, has reported losing $690.7 million in the first quarter of 2009. In the same period last year period Mechel posted a $500 million net profit.

Mechel’s earnings before interest, taxes, depreciation and amortization came to a negative $474.3, MTL News wrote citing Mechel’s press release.

Sales also fell sequentially by 13.9% and nearly 50%  from the year-ago period, to $1.2 billion.

Last year, Mechel brought in revenue of $2.3 billion in the first quarter. The steep drop was led chiefly by the company's mining segment. Sales in the sector sagged nearly 32% last quarter, chiefly because of a sharp decline in demand for coking coal.

Meanwhile, Mechel also agreed to refinance $2.6 billion of credit facilities used to buy chrome and nickel producer Oriel Resources Plc and Siberian coal assets, Bloomberg wrote Monday.

Mechel refinanced $1.6 billion of a $2 billion loan used to acquire the Yakutugol and Elgaugol coal fields in October 2007. The sum was refinanced at 6 percentage points over the rate offered by London interbank. Mechel also refinanced $1 billion of a $1.5 billion loan used to acquire Oriel in April 2008 at 7% over Libor.

The outstanding amounts on both facilities, which are due in December 2012, have been repaid using Mechel’s own funds and a loan from OAO Gazprombank.