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Severstal had until Wednesday to pay $12.6 million to a Luxembourg group. But the transfer was frozen by Citibank, due to sanctions once morest the main Russian shareholder.
The transfer of a Russian steel giant has been blocked by Citibank.
AFP
Russian steel giant Severstal, whose main shareholder Alexei Mordashov has been sanctioned by the EU, is fighting to avoid what would be the first default by a major Russian company since the start of the Russian intervention in Ukraine. In a press release published on the London Stock Exchange website, the group specifies that a “test” payment sent on March 16 had not “reached the account of the issuer”, a Luxembourg group, indicating that “the payment was frozen” by the latter’s bank, Citibank.
“We are seeking to initiate the application for licenses from relevant competent authorities that may be required for uninterrupted processing of payment instructions from Severstal,” the group said. Severstal had until Wednesday to repay a $12.6 million interest payment. “We cannot make the coupon payment to the holders of our eurobonds on time,” Severstal CEO Alexander Shevelyov said on his VKontakte page on Wednesday evening.
The blacklisted shareholder
“This is an extraordinary situation for us, which has occurred through no fault of our own, and in this regard it is important for me to clarify the following: Severstal maintains a stable financial situation, confirms its willingness to pay its debts in full and has the necessary resources to do so”, he added. Asked by AFP, Citibank declined to comment.
The Severstal group itself is not under sanctions, but the steel magnate and main shareholder Alexei Mordashov is among the Russian oligarchs placed by the EU on a blacklist of figures considered close to the Russian president. These personalities were sanctioned by a freezing of their assets and a ban on staying in the EU.
After fears of a Russian default, Moscow was finally able to repay $117 million in interest last week, with the US Treasury allowing sovereign payments but not private debt payments under sanctions terms.
(AFP)