Thursday, November 14, 2019
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Rusal in talks to delay debt repayment

Moscow: Rusal is in talks with lenders to delay a repayment next month of part of its $10 billion (Dh36.7 billion) debt pile, according to people familiar with the situation, in the latest sign of distress in Russia’s struggling industrial sector.

The woes of the Russian aluminium group — one of the first companies to get into difficulty in the 2008-09 financial crisis — highlight the plight of Russia’s metals sector as it struggles under the burden of a slowing economy, weak commodity markets and the imposition of sanctions from the west.

On Thursday, Russian finance minister Anton Siluanov said the government was considering creating a special fund, backed by state bank VEB, to support industry as it did in 2008-09, although he warned that the government would not bail out the country’s oligarchs. “We should help companies, not owners,” he told a business forum.

Rusal, controlled by Oleg Deripaska, has been negotiating with creditors since last year to hammer out a change in the terms of its debts, as its profitability is weighed down by aluminium prices at four-year lows.

Next month it has to make repayments of part of a pre-export facility of $3.2 billion, of which about $2.2 billion is held by about 20 international lenders

While Russia’s state banks and some international lenders have agreed to waive repayments on its debt until 2016, it has yet to receive approval from all its international creditors — necessary to avoid default ahead of a planned repayment in early April.

People familiar with the situation said the state-owned China Development Bank was one of several lenders that have not yet agreed to the restructuring.

Rusal still hopes to receive unanimous approval in the next few weeks, but it has begun discussions to enter a “forbearance” agreement in case it is not received, a person close to the company said.