Russian coal and steel company OAO Mechel (MTL) said Tuesday it has reached an agreement on the basic principles of refinancing its $1.5 billion bridge loan for a term of up to three and a half years.

The company said after negotiations with the banking syndicate, which provided it with a one-year loan to finance the purchase of Oriel Resources Ltd., it was granted Friday with a two-month payment term extension. The new payment date is July, 15, Mechel said.

The extension period will be used to execute the refinancing agreement, said the company, adding that participating banks of the syndicate are currently undergoing internal procedures to get the final approval of the conditions of the agreement.

-By Alexander Kolyandr, Dow Jones Newswires; +44 20 7842 9410; alexander.kolyandr@dowjones.com