Russia’s government has instructed Russian Railways to sell a 62-floor skyscraper in central Moscow to help reduce its $50 billion debt. This decision comes as the state-owned company, which employs about 700,000 people, faces falling revenues due to a slowdown in the economy driven by the war. With interest rates at a two-decade high, debt costs have increased significantly.
The government discussed selling the “Moscow Towers,” part of the “Moscow City” development, during a meeting last week. The aim is to help Russian Railways pay off part of its debt and avoid raising cargo transportation prices. The company has been directed to sell the skyscraper for no less than the 2024 purchase price, reported to be about 193.1 billion roubles ($2.42 billion).
No decisions have been made regarding other potential measures, such as raising transportation prices, debt restructuring, state subsidies, or tax adjustments. Additionally, there is an option to convert some bank debt into shares, but this requires discussions that could take up to three years. The proposal to convert debt into shares was previously rejected by creditors. Russian Railways also did not follow through on plans to relocate its main office to the skyscraper.
With information from Reuters