Russia’s richest man: Approved by the Ministry of Finance to repay foreign exchange to foreign investors to avoid cross-default

Financial Associated Press (Shanghai, editor Shi Zhengcheng) News this weekend, Vladimir Potanin, the richest man in Russia and chairman of Norilsk Nickel, confirmed in an interview with the Russian newspaper RBC that the government has approved the use of rubles Repay foreign debts in foreign currencies.

As an important global resource company, Nornickel supplies nearly 40% of the world‘s palladium production capacity, as well as about 10% of platinum and refined nickel, and 3% of cobalt. Potanin told the media that Nornickel had previously paid a USD 6.4 million coupon due in 2025 on schedule, and also repaid a USD 500 million bond due on April 8 this year ahead of schedule. .

The richest man in Russia emphasized that even a small amount of debt defaulted would lead to a cross-default on all bonds. In his view, it is not in our interest if all corporate debt and national debt are in a state of immediate repayment.

Holders of Russian foreign debt look up

Potanin’s latest remarks also help foreign investors who still hold Russian assets to get a glimpse of the latest developments, although many questions remain unanswered.

Under a decree signed by Russian President Vladimir Putin on March 5, Russian debtors were allowed to pay foreign creditors in rubles as a way for the country to avoid default under controls. At the same time, under this rule, with the approval of the Ministry of Finance, Russian companies can pay foreign currency to debtors not included in the list of “unfriendly” countries.

While the rules are clearly written, news from the bond market over the past week has puzzled investors: Gazprom and Rosneft, also benchmarks in Russia, both paid their dollar debt this week, However, the Russian Railways dollar bond paid interest only ten days after the maturity date, and another euro bond that needs to pay interest on March 9 has not yet moved.

In his latest interview, Potanin also did not disclose whether the Ministry of Finance agreed to pay foreign exchange to creditors of all countries, only saying that the time limit for the approval is three months, which can be extended for another three months after the expiration.

However, in an exclusive interview, Potanin also stated that he had proposed to the government to grant a comprehensive exemption to the foreign exchange purchase ban for large companies such as Nornickel, but after consulting with senior officials of the Russian Central Bank, it was found that such an exemption from foreign exchange control is not only inadvisable, but even impossible. Potanin said that was also the reason why a special committee, led by Finance Minister Siluanno, was set up to individually review business requirements.