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Russia's Sistema in second technical default on credit in Rosneft row
August 28, 2017 / 5:12 PM / 23 days ago

Russia's Sistema in second technical default on credit in Rosneft row

MOSCOW (Reuters) - Russian conglomerate Sistema said on Monday it had run into a second technical default on its credit due to an asset freeze as part of its legal dispute with oil firm Rosneft, but said it did not expect further defaults.

A court earlier froze a part of Sistema’s stake in mobile operator MTS as well as its shares in the Medsi clinic chain and Bashkirian Power Grid Company while hearing a more than $2 billion damage claim filed by Rosneft.

The technical default was on credit obligations amounting to the equivalent of 8.9 billion roubles ($152 million), Sistema said without specifying what those debt instruments were.

A technical default occurs when some conditions on credit facilities are breached. Creditors can demand early repayment.

Last month, the firm ran into a technical default on 3.9 billion roubles of loans although the company said it did not expect creditors to demand early repayment.

The asset freeze is not expected to trigger any more defaults, Sistema said on Monday.

“The corporation’s remaining loan agreements do not contain a condition whereby this arrest of shares will lead to a technical default,” Sistema said in a statement.

Sistema, which said it continued to service its financial obligations in full, also said it had asked lenders to provide waivers in connection with the latest technical default.

($1 = 58.5373 roubles)

Reporting by Maria Kiselyova; Editing by Edmund Blair

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