By Gleb Stolyarov and Darya Korsunskaya MOSCOW, Dec 18 (Reuters) - Russia's government has ordered Russian Railways to sell a 62-floor central Moscow skyscraper to help the railway monopoly pay off
Russia Directs Railways to Sell Moscow Towers for Debt Relief
(Corrects to show that Kostin did not use the 400 billion rouble figure in paragraph 12)
By Gleb Stolyarov and Darya Korsunskaya
MOSCOW, Dec 18 (Reuters) - Russia's government has ordered Russian Railways to sell a 62-floor central Moscow skyscraper to help the railway monopoly pay off some of its $50 billion debt, three sources told Reuters.
The government is discussing ways to prop up Russia's biggest commercial employer, Reuters reported last month.
State-owned Russian Railways, which employs about 700,000 people, has suffered a fall in revenues amid a sharp slowdown in Russia's war economy while debt costs have soared, driven by the highest interest rates in two decades.
The option of selling the gleaming "Moscow Towers", part of the Manhattan-style "Moscow City", was discussed at a government meeting last week, a source close to the talks told Reuters on condition of anonymity due to the sensitivity of the situation.
A decision was made that Russian Railways should sell the skyscraper to pay part of its debt and to avoid significant cargo transportation price hikes, three sources told Reuters.
One of them said Russian Railways was instructed to sell the building for not less than the 2024 purchase price, which Russian newspapers Kommersant, Vedomosti and RBC reported to be 193.1 billion roubles ($2.42 billion).
Russian Railways and the government did not respond to requests for comment.
A sale could help cut some of Russian Railway's debt if it can find a buyer amid a significant slowdown in Russia's economy which is due to grow 1.0% this year, down from 4.3% in 2024.
No decision has been made on other measures discussed earlier, including rising cargo transportation prices, debt restructuring, state subsidies and reducing or postponing tax payments, one of the sources said.
An option to convert part of the bank debt into shares is still on the table, the source added.
Russian Railways, the Ministry of Finance and the Central Bank must discuss the possibility of the conversion for up to three years with the buyback option under financial guarantees provided by the Ministry of Finance, the source said.
Andrei Kostin, CEO of Russian Railways' largest lender VTB told Reuters that creditors rejected a proposal to convert debt into shares.
Moscow City is a cluster of skyscrapers on the banks of the Moskva River which is home to major Russian companies including VTB Bank, as well as government ministries.
Russian Railways had planned to move its central office to the skyscraper and to cover the purchase price by selling other office real estate in Moscow, but that never happened.
($1 = 79.8000 roubles)
(Reporting by Gleb Stolyarov and Darya Korsunskaya; Editing by Guy Faulconbridge and Alexander Smith)
