Sanctioned Russian shipowner Sovcomflot’s first published financial results since 2021 show how it continues to extricate itself from debt commitments with Western lenders.
The state-controlled company’s annual accounts for 2023 reveal that towards the end of the year, it fully repaid $197.5m under a secured bank loan provided by an unnamed foreign bank.
The lender had demanded early repayment, the shipowner said.
Moscow-listed Sovcomflot transferred ownership of four ships financed under the deal to a Russian shipowning subsidiary.
The accounts also show the group acquired a vessel built at a state-controlled shipyard and at the same time recognised liabilities of $103.1m for secured loans based on leasing agreements with a government organisation that provided construction financing.
The lease contract period is 10 years, with a purchase option at the end.
There is also mention of a loan provided by a Russian state-controlled bank “for which it is impossible to fulfil certain terms of the loan agreement due to sanctions restrictions”.
However, the bank does not require early repayment of the loan, Sovcomflot added.
“Loan repayment is carried out according to the schedule, which provides equal payments until July 2029,” it said.
“The group’s management is working together with the bank on restructuring debt.”
There is $143.7m outstanding on this facility.
Bonds placed and redeemed
Then there is the question of its bond debt.
Sovcomflot was unable to pay instalments on eurobonds issued in Ireland due to sanctions imposed after the Ukraine invasion in 2022.
The owner had sold a $498.4m series that matured last year and another $430m due in 2028.
Payment agent Citibank refused to accept coupon payments from Sovcomflot.
Replacement bonds were then issued on the Moscow Stock Exchange and investors were invited to exchange their debt.
As of 31 December, the company had swapped $383.8m of the 2028 bond.
It paid off the Russian part of the 2023 bond early, spending $377.1m.
The amount of eurobonds still held overseas totalled $98.5m at year-end.
The accounts also revealed that in March last year, Sovcomflot placed Chinese-denominated bonds worth CNY 2.6bn ($377.3m).
These are due in March 2026 at interest of 4.95% per annum.
In January 2024, the shipowner paid an interim dividend for 2023 of RUB 6.32 ($0.07) per share.
Net earnings for 2023 soared to $942m from $385.2m in 2022, as disruption from Russian crude oil import bans in Europe added to tonne-miles.
