Russian Railways may offer preferred shares publicly

VLADIVOSTOK, Sep 7 (PRIME) -- Russian Railways is considering financing options for its 2025 development program, including a public offering of preferred shares, CEO Oleg Belozyorov told reporters on Thursday.

The program includes projects totaling 7.5 trillion rubles, of which Russian Railways is to invest about 5.5 trillion rubles. “We will use the entire array of possible financial options. We even do not reject the idea of offering preferred shares in the future,” he said.

Previously, the company placed 50 billion rubles of preferred shares in favor of the National Wealth Fund, and used the money to invest in development of the Baikal–Amur Mainline (BAM) and the Trans–Siberian Railway (Transsib).

“We sold preferred shares to the state, but what stops us from selling them on the market? The goal here is not to worsen our covenants, as we need money for our capital,” he said without disclosing a possible amount of offer and the terms.

He said that Russian Railways is to construct many railroads until the end of 2025, including the Northern Latitudinal Railway, and plans to invest in infrastructure, locomotives, and other fixed-capital assets. But the company tries to cut the share of state investment and use alternative sources.

“We would like to do more, but covenants limit us. We would have raised some money if we were able to increase the covenants…We have no problem with placing our financial mechanisms and raising money. But we have limitations, so we use other mechanisms. I think, we will now work out a mechanism of perpetual bonds,” he said.

(57.3387 rubles – U.S. $1)

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