Banks extend RUSAL standstill to Sept 18 - source

MOSCOW. July 30 (Interfax) - United Company RUSAL's creditor bankshave approved extending the standstill order on the Russian aluminumgiant's debt to September 18, a source in banking circles told Interfax. "RUSAL's creditor banks approved extension of the standstill toSeptember 18 at a meeting in Paris yesterday. They also discussed thekey terms of the long-term restructuring deal reached by the creditors' committee and RUSAL. Overall the banks supported the agreement. This isa critical result of the talks. The next and final phase of therestructuring is agreeing the terms of the restructuring approved by thecreditors' committee and RUSAL in the loan committees of the banks,which will require one or one and a half months," the source said. "The banks familiarized themselves [with the plan] and on the wholesupported the approach to the restructuring and are now beginning todiscuss the details. The standstill has been extended, as expected, toSeptember 18," another source familiar with progress in the talks said. The restructuring schedule provides for a seven-year restructuring,a four-year extension and three years for refinancing. "The interest rates will depend on the financial covenants, whichwill be tied to the borrower's business and to the economy. One of thekey covenants concerns the ratio of debt to EBITDA, which must remainrealistic under current conditions," a source at one of the banksrepresented on the creditors' committee said. He declined to specify thelevel of the debt burden. RUSAL accepted the creditors' condition concerning the potentialsale of its 25% stake in MMC Norilsk Nickel (RTS: GMKN) if the stake'smarket value rises to exceed the value of RUSAL's entire debt. The stakeis currently held by Vnesheconombank (VEB) as loan security. "RUSALviews that condition as normal. They understand that the company has alot of debt hanging over it. Everyone is seeking compromise," the sourcesaid. Oleg Deripaska, RUSAL's chief beneficiary and general director,previously said that within a month after the conclusion of an agreementwith the creditors' committee on the main terms of the restructuring,agreements would be signed with each of the creditor banks. The coordinating committee held a presentation in Paris onWednesday on the final plan for the long-term restructuring of RUSAL'sdebt. The coordinating committee includes SMBC, ING, Calyon, BNP Paribas,Societe Generale, Unicredit Group, Natixis and Royal Bank of Scotland. (Our editorial staff can be reached at eng.editors@interfax.ru)