A Citigroup correspondent bank has blocked the money due to sanctions.
Russia's Severstal, owned by Alexei Mordashov, which has come under EU and British sanctions, has been unable to pay investors its Eurobond debts due to a bank blockade. This was reported by Bloomberg.
Thus, the company became the first Russian company to allow a technical default on its securities since the imposition of sanctions against Russia over the war in Ukraine.
Although the company transferred the required payment of $ 12.6 million to the Citigroup correspondent bank ahead of time, the bank blocked them in its account. The financial institution explained that the company must obtain permission to conduct a transaction with the US Treasury Department.
However, Severstal failed to obtain permission in time and unblock the funds for the transfer to the paying bank, and investors did not receive their payments on time.
In addition, the grace period for debt repayment has already expired. Investors can wait a few days and then demand the full amount of debt. Severstal's total debt as of December 31, 2021 amounted to $ 1.8 billion.
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Earlier it was reported that the company is looking for an alternative to repay the debt on time.
In addition, more and more analysts expect Russia to default due to sanctions.
