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MOSCOW, June 8 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
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
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
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