Rusnano's financial recovery 'practically complete' - Putin

MOSCOW. Oct 30 (Interfax) - JSC Rusnano's financial recovery is practically complete, Russian President Vladimir Putin said at a meeting with the state nanotech company's head, Sergei Kulikov.

"I understand that the company's financial condition has changed for the better, that its recovery is practically complete," Putin said.

Kulikov said the company had focused on several spheres, where it had selected partners who had agreed to cooperate with it. "In doing this, we did not proceed from what we currently have [Rusnano's assets] but rather from what the government and ministries need to be done within the framework of national goals," Kulikov said.

According to information for the meeting, Rusnano has come up with a mechanism for the "pre-payment of outstanding debt" on the company's bonds.

Rusnano's bond debt consists mostly of nine-year Series 8 bonds. The issue is worth 13.4 billion rubles and is secured by a state guarantee, and matures on March 27, 2028. Earlier this year, Rusnano twice defaulted on coupon payments on this issue, in March and September.

Rusnano's press service said that as part of the anti-crisis strategy for the group's financial recovery, the company had pre-repaid bank loans, 80% of it from its own funds. As a result, the budget saved 35 billion rubles.

Rusnano's investment portfolio revenue over the past five years has exceeded 80 billion rubles, with an investment multiple of 1.6x, representing over 80% of revenue received from 2008 to 2020.

Also, the value of its competence centers has tripled, and expenses have been reduced by two-third compared to the 2008-2020 period. Today, return on assets is 16-18%, which is "several times the sector average."

"The government investment efficiency indicator was one of the highest for recipients of budget funds at 6.2 including taxes paid and interest on the debt," the company said.

Rusnano's portfolio companies have raised 125 billion rubles in extra-budgetary financing, ensuring growth in the value of the competence centers independent of budgetary funds. The value of the group's key assets has nearly tripled over five years due to new products, market expansion, investment programs and the optimization of consolidated management and development expenses.

"With the end of the era of debt-based budget financing for venture capital, management has ensured break-even autonomous operations, the company has optimized operations, and a plan has been determined for the transition to an industrial model based on portfolio normalization and investment partnerships with state corporations, the banking sector and private businesses," the press service said.

It said anticipated growth in the coming years would be supported by a program of extra-budgetary and internal investments. The group is consolidating promising portfolio assets and established scientific and technological capabilities into a research and production holding company on a product-sector principle.

The group's focus is on projects in small- and medium-tonnage chemicals, ecology and environmental management, energy (power engineering and energy services), hybrid and electro logistics and critical infrastructure security.

"The company intends to strengthen its role in delivering state priorities and scaling technology investments, focusing on mass investors and public engagement to establish technological sovereignty through investments in future technologies," the company said.

Rusnano has repeatedly warned of a risk of bankruptcy if it does not receive additional funding to settle with creditors. Reports of the state company's financial difficulties began emerging at the end of 2021. A source close to the company told Interfax that from 2016 to 2020, Rusnano increased its loan portfolio by over 100 billion rubles. By the end of 2020, this led to the company's external debt reaching its highest ever level, the source said.

In July 2024, Rusnano said it had repaid about 80% of its historical debt accumulated before 2021 to its bank creditors, with a discount of 20%, or 40% including interest savings. The company did not disclose the amount of the payments. The annual debt servicing cost had exceeded 12 billion rubles, it said.

As a result, in September last year, Rusnano declared that signs of bankruptcy had been eliminated thanks to the financial recovery measures undertaken.

The head of Rusnano said at a meeting with the Russian president in May this year that the company had overcome its liquidity crisis and did not plan to borrow, but that "there is still a matter for discussion" regarding debt.