Russian banker backtracks on 'debt restructure'

The Russian government said it had no plans to restructure up to $400 billion in companies' foreign debts on Tuesday as a local banking lobbyist who floated the idea backed away from his proposal, made two months ago. Earlier a report in Japan's Nikkei newspaper had caused a sell-off in the euro by quoting Anatoly Aksakov, president of a regional banking association, as saying he had asked the government to broker talks with foreign lenders on Russia's corporate debt.
"The government of the Russian Federation does not plan to consider the issue of restructuring the corporate debt of Russian banks and companies," Finance Minister Alexei Kudrin told Reuters when asked about the report. Kremlin chief economic aide Arkady Dvorkovich said no such proposals had been made and that Russian companies were continuing to service debt as normal.
Aksakov told Reuters he sent a letter to Russia's First Deputy Prime Minister Igor Shuvalov in December asking the government to help organise a discussion - not negotiations - between lenders and creditors. "Now that I see the market reaction (today), I am convinced the government should keep its distance," he said.
Aksakov said he got the original idea after watching a presentation by consultants from KPMG on different countries' experiences of corporate debt restructuring. The initiative was backed by some members of his association, mostly subsidiaries of foreign banks, Aksakov added. He said Shuvalov did not respond to his letter.
"I did not ask the government to moderate negotiations between lenders and foreign banks ... Only some companies have problems with their foreign debt and they should negotiate directly with lenders," Aksakov said.
Aksakov named the world's largest aluminium producer Rusal, controlled by tycoon Oleg Deripaska, as one of the companies having problems with its foreign debt. Though the Nikkei report was denied by the Kremlin the market reaction indicated a concern among investors over the $136 billion in foreign debt and interest which Russian companies must pay this year.