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Russia's government has directed state-owned Russian Railways to sell the 62-storey Moscow Towers skyscraper in central Moscow as part of efforts to manage the company's mounting debt burden, estimated at around USD 50 billion. The landmark asset, acquired last year for roughly USD 2.4 billion, is expected to be sold at no less than its purchase value. The move follows a slowdown in revenues and sharply higher borrowing costs amid elevated interest rates. Proceeds from the sale are intended to reduce debt and avoid sharp increases in cargo transportation tariffs, while broader financial support measures remain under discussion.
The Russian government has instructed Russian Railways to sell its 62-floor Moscow Towers skyscraper in Moscow City, aiming to partially offset the railway monopoly's sizeable debt pile, estimated at about USD 50 billion. Advertisement
The directive was discussed during a government meeting in the past week, where officials examined options to stabilise the finances of the state-owned company, one of the country's largest employers with a workforce of around 700,000. Russian Railways has been grappling with declining revenues amid a broader economic slowdown, while debt servicing costs have risen sharply due to the highest interest rates seen in over two decades.
Under the instruction, the company has been asked to sell the skyscraper for no less than its original acquisition price, reported at around USD 2.4 billion when it was purchased last year. The sale is intended to reduce debt levels and help avoid significant hikes in cargo transportation charges, which could have wider economic implications.
Other measures previously considered, including restructuring debt, increasing tariffs, providing state subsidies, or deferring tax payments, have not yet been finalised. One option still under review involves converting a portion of bank debt into equity with a potential buyback mechanism supported by state financial guarantees, although creditors have already rejected one such proposal.
Russian Railways had earlier planned to relocate its headquarters to Moscow Towers and fund the purchase by selling other office properties in the capital. That plan did not materialise, leaving the skyscraper as a high-value asset now earmarked for divestment as part of the company's financial recalibration.
Source - Reuters
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