MOSCOW, June 1 (RAPSI) – VTB Bank, the mining and metals holding company Mechel failed to reach a deal to end a lawsuit over debt of 3 billion rubles ($56.2 million), RAPSI reported on on Monday from the Ninth Commercial Court of Appeals.

The court of appeals on Monday also dismissed an appeal filed by Mechel against a ruling by the Moscow Commercial Court that fully upheld VTB’s lawsuit last December. A counter-claim by the steel maker on changing the loan agreement terms was also rejected.

At the previous hearing on April 30, Mechel claimed in court that the loan guarantors, Chelyabinsk Metallurgical Plant, Mechel Service, Bratsk Ferroalloy Plant and Mechel Trans, fully repaid the interest debt to VTB within the lawsuit, which is some 2.87 bln rubles ($54 mln). The remaining outstanding debt is a penalty of 105 million rubles ($1.9 mln).

In December 2014, the Moscow Commercial Court fully upheld VTB’s lawsuit that Mechel pay the interest based on the December 27, 2010 loan agreement when the bank issued a loan of over 43 billion rubles ($809 mln). In March 2014, the borrower ceased servicing the loan. By September 25 when the lawsuit was filed, there was an interest debt of 2.99 bln rubles ($54 mln), the money requested in the lawsuit.

Later, VTB demanded the pre-term payment of the loan. Last April, the Moscow Commercial Court upheld the bank’s lawsuit and ordered that Mechel pay over 44.5 bln rubles ($837 mln) in principle, 3.2 bln rubles ($60.2 mln) in interest, and penalties of 1.9 bln rubles ($35.7 mln) for the principle  and 557 mln rubles ($10.4 mln) for the interest. The ruling has been appealed and has not yet been enforced.

Mechel is heavily in debt including $2.3 billion owed to Gazprombank, $1.8 billion to VTB and $1.3 billion to Sberbank.

Industry Minister Denis Manturov said in March that Mechel cut its debt to $6.4 billion from $8.6 billion, according to RIA Novosti. About 40 percent of Mechel’s debt is in rubles.