Sanctions threaten Russian companies with technical default

Organizations in Russia found themselves in a state of technical default if they do not pay their debts on foreign currency loans and Eurobonds.  Foreign firms block payments from companies whose shareholders are under the sanctions of EU.  Some companies have already faced difficulties in conducting financial transactions, while others are still facing similar problems.

According to Vedomosti, there are obvious problems with such large organizations as Severstal, whose beneficiary Alexei Mordashov was included in the sanctions list. As a result, the company that tried to transfer the payment on European bonds failed to do so. Citibank's New York division blocked the financial transaction.

Uralkali faced the similar trouble. It was refused a transfer by a French bank, not allowing the company to pay off its foreign currency debt. The reason was the sanctions against Dmitry Mazepin, who is a shareholder of the holding. Mazepin himself by this time had already sold his assets in the company, leaving the post of its head, but the changes in the management of the enterprise did not satisfy the French bankers.

It is known that the financial operations of the Evraz company, the share of which is owned by Roman Abramovich, turned out to be problematic.

The payment was eventually made, but it was done the very next day after the company tried to pay the coupon on Eurobonds. New York Societe Generale suspended the payment.

Problems with foreign exchange transactions may primarily affect those Russian companies that are engaged in the production of metal, work of transport transport, banking, and oil sectors, as they are connected with the entrepreneurs or government bodies under sanctions.

According to experts, both the position of a foreign bank acting as counterparty in financial transactions and the economic priorities of other countries are of great importance in this.

A clear example of the ambiguity of the position of Western counterparties can be the Norilsk Nickel company, the bank of which refused to block financial transactions.

Experts see the situation in the field of agrochemistry, the products of which in the United States have been recognized as essential goods, to be more favorable.

It is known that the Ministry of Finance has already offered entrepreneurs in Russia to transfer the servicing of their foreign exchange obligations to a scheme related to the unfreezing of the Central Bank's reserves. The further development of the situation will show to what extent this option will be acceptable for Russian business.