Sistema hopes creditors demand no early debt payment after default

MOSCOW, Aug 30 (PRIME) -- Russian multi-industry holding Sistema hopes that creditors will not demand an early debt redemption following a 8.9 billion ruble technical default the company said in a statement on Wednesday quoting Senior Vice President and CFO Vsevolod Rozanov.

On Monday, Sistema announced the default after a June order of the Arbitration Court of the republic of Bashkortostan to seize assets of Sistema and Sistema-Invest, including a 31.76% stake in mobile operator MTS, 100% in healthcare company Medsi, and 90.5% in Bashkir Power Grid Company, under a 170.6 billion ruble case by oil major Rosneft and its unit Bashneft.

“We are continuing discussions with our lenders and have requested waivers in connection with the breach of the conditions due to the asset arrest. At this stage we have

no reason to believe that any creditor will demand accelerated payments under Sistema’s credit agreements,” Rozanov said as cited by Sistema.

“I would like to stress that Sistema’s financial position remains solid. During the second quarter, we successfully optimized our liabilities and strengthened our cash position at the corporate center, in large measure by borrowing a total of 40 billion rubles in the public market and from state banks, which underscores Sistema’s creditworthiness and the high level of trust that financial institutions have in the company.”

(58.5320 rubles – U.S. $1)

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