The Russian company Severstal, which belongs to oligarch Olexiy Mordashov, who is close to Volodymyr Putin, has been unable to pay its Eurobond debt to investors before its grace period due to funds blocking by Citigroup.
It is noted that this will be the first Russian company to have a technical default on its securities after the Russian invasion of Ukraine.
Although "Severstal" has already transferred $ 12.6m to the correspondent bank, Citigroup has blocked it in its account. The bank explained that although Severstal was not subject to US sanctions, it must obtain permission from the US Treasury Department to conduct the transaction.
The company writes that Severstal's default may increase foreign investors' concerns about the ability of Russian companies to continue to meet their obligations under Western sanctions. As expected, the creditors may wait a few days to see if the company can still obtain the necessary permits to pay interests and not demand full repayment.
The controlling shareholder of Severstal, Olexiy Mordashov, is on the EU and British sanctions lists. He recently tried to hide his 142-meter yacht Nord near Seychelles.
In 2017, Severstal Group lost one of its Ukrainian assets, the Dniprometyz plant.