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UPDATE 1-Mechel to pay first full preferred share dividends since 2011
June 8, 2017 / 9:16 AM / 5 months ago

UPDATE 1-Mechel to pay first full preferred share dividends since 2011

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MOSCOW, June 8 (Reuters) - The board of Russian metals and mining giant Mechel has recommended paying full dividends to preferred shareholders for the first time since 2011 now the company has fought back from the brink of bankruptcy.

Mechel borrowed heavily before Russia’s economic crisis hit in 2014 and was facing what would have been the country’s biggest corporate collapse after struggling with debt repayments as demand for its products weakened and coal and steel prices fell.

But the company, controlled by businessman Igor Zyuzin, struck a debt-restructuring deal with creditors last year and posted a net profit of 13.9 billion roubles ($244 million) for the first quarter of 2017, helped by higher coking coal prices.

Mechel said in a statement on Thursday its board had recommended dividend payments of 10.28 roubles per preferred share for 2016, when it made a net profit of 7.1 billion roubles.

The company has paid preferred shareholders a minimum payment of 5 kopeks per a share since 2011 and has yet to resume full dividend payments to ordinary shareholders.

Mechel’s preferred shares on the Moscow Exchange jumped 7 percent after the announcement.

Chief Executive Oleg Korzhov said last month that management had asked creditors for permission to make the dividend payments, currently set at 20 percent of net profit.

Lenders Sberbank and VTB said last week they both supported the proposal. ($1 = 56.9392 roubles) (Reporting by Jack Stubbs; Editing by Maria Kiselyova and David Clarke)

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