Business
Russia considers capital injection for indebted Russian Post, CEO says
Russia considers capital injection for indebted Russian Post, CEO says
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The Russian government is considering options to provide support to state-owned postal and logistics service Russian Post to help it handle its 140 billion roubles ($1.83 billion) in debt, its CEO Mikhail Volkov said on Thursday.Debt and debt-servicing costs of many Russian companies, including state conglomerates such as Russian Railways and Russian Post, increased after the central bank raised its key interest rate to the highest level since the early 2000s in 2024. The central bank said last month that it had eased reserve requirements for restructured loans, which could help heavily indebted companies such as Russian Railways reduce their debt burden. Speaking at a hearing in parliament, Volkov said the company had embarked on a cost-cutting programme and sold some of its non-core assets, bringing the company an additional 50 billion roubles ($654.45 million). "We understand and are discussing with the government that measures to improve internal efficiency alone are not sufficient to solve the systemic issues and problems that the Russian Post is facing," Volkov said. State lender VTB RUS:VTBR said that it had purchased a stake in the Russian Post's banking arm for 36 billion roubles. The cost-cutting measures have saved the company more than 17 billion roubles so far, Volkov added. Volkov estimated the current debt-servicing costs at 20 billion roubles a year. The government did not comment on the potential cost of the recapitalisation. The government is also discussing ways to prop up Russian Railways, the country's biggest commercial employer, which has built up a 4 trillion rouble debt pile. ($1 = 76.3955 roubles)