17 Oct 2023 15:04

Russian govt restructuring Rusnano finances, determining fate of projects - Chernyshenko

BEIJING. Oct 17 (Interfax) - The Russian government is currently assessing Rusnano's project portfolio as part of restructuring the state corporation's financial situation, Deputy Prime Minister Dmitry Chernyshenko said in a statement.

"The government is currently aiming to complete its analysis of all Rusnano venture investment projects, and to ascertain which ones will be implemented and which ones should be shut down," Chernyshenko told reporters in response to a request to comment on the situation at Rusnano.

Rusnano, whose financial problems were the main topic on Russia's domestic bond market at the end of 2021 and beginning of 2022, once again found itself at the center of attention in early October, when it warned that it was unable to meet its debt obligations with its own funds and would very likely head into bankruptcy if the government were not to intervene in order to provide liquidity to fulfil the obligations to creditors. Creditors' claims, not including interest on loans and accumulated coupon income on bonds, significantly exceeded the value of the company's assets at the end of the first half of 2023, Rusnano said in a report.

"Given the size of the payables in the form of loans and bond debt due to be repaid before the end of 2023, Rusnano's fulfilment of debt obligations in full exclusively with its own funds is objectively impossible." Therefore, Rusnano currently "meets the criteria for insolvency and insufficiency of assets" as defined by the law "On Insolvency/Bankruptcy". "If JSC Rusnano's shareholder does not take a decision to normalize accounting (financial) statements and provide (restore) liquidity for fulfillment of obligations to creditors, including in the face of budget and other regulatory restrictions, it is highly likely that signs of bankruptcy will appear," the company warned in the report.

"The government is carrying out systematic work to restructure the Rusnano group of companies. The goal is to organize work with its projects most effectively for our economy, as well as take decisions on strategically significant and key assets," Chernyshenko said in response to a question about Rusnano's prospects in the current situation.

"The government's task is naturally to minimize financial risks, to ensure that the least damage is caused to the economy. At the same time, we expect some projects to generate results," Chernyshenko noted.

Rusnano's net debt stood at 95.56 billion rubles as of June 30, up from 90.85 billion rubles at the start of the year. The company is due in December to redeem two issues of bonds that the government does not guarantee, at total par value of 15.5 billion rubles. However, the exact volume of securities traded on the market is unknown, as Rusnano has not disclosed the results of interim redemptions. Bondholders have the right to present their respective securities for redemption because the issuer has violated the covenants.