×
Enjoying ad-free content?
Since July 1, 2024, we have disabled all ads to improve your reading experience.
This commitment costs us $10,000 a month. Your support can help us fill the gap.
Support us
Our journalism is banned in Russia. We need your help to keep providing you with the truth.

Russneft Debt Restructuring in 'Final Stages'

Sistema, billionaire Vladimir Yevtushenkov's holding company, plans to come up with a strategic plan for Russneft by the end of the year and is close to restructuring the Russian oil producer's debts, CEO Leonid Melamed said Wednesday.

Talks to restructure Russneft's debts are "in the final stages," Melamed told reporters.

Sistema bought 49 percent of debt-laden Russneft for no more than $100 million in April. The purchase secured additional oil for Sistema's Bashneft unit.

Sistema's board expects to receive proposals for Russneft's strategic development by the end of the year, Melamed said.

"One way to reduce debt would be to offer creditors equity," said Alexei Kokin, an oil and gas analyst at Metropol. "Glencore, which trades oil, might be interested, Sberbank probably not."

Russneft owed $1.5 billion to Glencore International, Vedomosti reported in May. Glencore made two long-term loans of $554 million to Russneft, according to a Glencore bond prospectus from August 2006.

Russneft had about 182 billion rubles ($5.9 billion) of debt last year, according to a financial statement based on Russian accounting standards. It owed $3.71 billion to Sberbank, the statement said.

Sistema also said Wednesday that second-quarter profit slumped 41.5 percent because of foreign exchange losses.

Net income declined to $144 million from $246.2 million a year earlier, the company said. Sales rose 63 percent to $6.92 billion.

Revenue was nearly $7 billion in the three months to end June, compared with $4.2 billion a year ago.

Sistema's shares closed up 0.2 percent in London, outperforming the FTSE-100, which fell 0.2 percent.

"Solid results were posted across our entire portfolio. … We will maintain our focus on optimizing our portfolio in the second half, while remaining alert to new investment opportunities," Melamed said in a statement.

Sistema's assets also include Russia's biggest cell phone operator, Mobile TeleSystems, and tour operator Intourist.

(Bloomberg, Reuters)

… we have a small favor to ask. As you may have heard, The Moscow Times, an independent news source for over 30 years, has been unjustly branded as a "foreign agent" by the Russian government. This blatant attempt to silence our voice is a direct assault on the integrity of journalism and the values we hold dear.

We, the journalists of The Moscow Times, refuse to be silenced. Our commitment to providing accurate and unbiased reporting on Russia remains unshaken. But we need your help to continue our critical mission.

Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and you can be confident that you're making a significant impact every month by supporting open, independent journalism. Thank you.

Once
Monthly
Annual
Continue
paiment methods
Not ready to support today?
Remind me later.

Read more