MECHEL ANNOUNCES REFINANCING OF ITS SHORT-TERM CREDIT FACILITIES

Moscow, Russia – July 13, 2009 – Mechel OAO (NYSE: MTL), one of the leading
Russian mining and metals companies, announces signing of the agreements to
refinance its short-term credit facilities totaling 2.6 billion US dollars
raised to purchase assets in Yakutia and Oriel Resources Ltd. (Great Britain).
As a result of negotiations with syndicates of banks that provided Mechel with
credit facilities for acquisition of Yakutugol Holding Company OAO and Elgaugol
OAO in October, 2007 and Oriel Resources Ltd. (Great Britain) in April, 2008,
the loan agreements for refinancing of these facilities by means of long-term
instruments have been signed.
Specifically, the sum refinanced under the credit facility for acquisition of
coal assets in Yakutia amounted to 1.6 billion US dollars at LIBOR rate +6%, the
total facility amount being 2 billion US dollars. Maturity period provides for
monthly equal installments from September, 2009 to December, 2012. The remainder
of the credit facility of 400 million US dollars was repaid earlier with the
company’s own funds according to the agreed schedule.
Credit facility for Oriel Resources Ltd. acquisition of 1.5 billion US dollars
has been refinanced in the amount of 1 billion US dollars at LIBOR rate +7%.
Maturity period provides for monthly equal installments from July, 2010 to
December, 2012. The remainder of the credit facility of 500 million US dollars
was repaid from funds raised from Gazprombank three-year loan, according to the
agreement which was signed by the company in February, 2009.
Mechel OAO CFO Stanislav Ploschenko commented: “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 current market environment. Financial
covenants were also adapted to the company’s current situation. I would like to
emphasize that as a result of these credits refinancing the short-term debt of
the company of 2.6 billion US dollars will be again reclassified as long-term
debt in corporate financial reporting making performance of financial and
operational activities much easier. Moreover the refinancing structure has been
modeled assuming that even if current level pricing for Mechel’s products, that
are not the highest ones, remains, the company will face no difficulties to meet
its financial obligations. I consider this refinancing as an important sign that
confirms Russian borrowers’ ability to carry on successful and constructive
dialogue with international financial organizations in the current difficult
situation”.
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Mechel OAO
Ilya Zhitomirsky
Phone: + 7 495 221 88 88
ilya.zhitomirsky@mechel.com

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Mechel is one of the leading Russian companies. Its business includes four
segments: mining, steel, ferroalloy, and power. Mechel unites producers of coal,
iron ore concentrate, nickel, steel, rolled products, ferroalloys, hardware,
heat and electric power. Mechel products are marketed domestically and
internationally.
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Some of the information in this press release may contain projections or other
forward-looking statements regarding future events or the future financial
performance of Mechel, as defined in the safe harbor provisions of the U.S.
Private Securities Litigation Reform Act of 1995. We wish to caution you that
these statements are only predictions and that actual events or results may
differ materially. We do not intend to update these statements. We refer you to
the documents Mechel files from time to time with the U.S. Securities and
Exchange Commission, including our Form 20-F. These documents contain and
identify important factors, including those contained in the section captioned
“Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in our
Form 20-F, that could cause the actual results to differ materially from those
contained in our projections or forward-looking statements, including, among
others, the achievement of anticipated levels of profitability, growth, cost and
synergy of our recent acquisitions, the impact of competitive pricing, the
ability to obtain necessary regulatory approvals and licenses, the impact of
developments in the Russian economic, political and legal environment,
volatility in stock markets or in the price of our shares or ADRs, financial
risk management and the impact of general business and global economic
conditions.