Russian Developer Seeks State Bailout as Shares Tumble Over 8%

Shares of Samolet Group, one of Russia's largest real estate developers, fell sharply this week following its request for a substantial government loan. The stock dropped nearly 7% during trading on Wednesday, February 4th, and continued its decline into Thursday. By midday on the 5th, shares had fallen an additional 1.56%, bringing the total loss over the period to more than 8%. Trading data from the Moscow Exchange confirmed the rapid sell-off.

Analysts point to a confluence of pressures impacting Samolet's finances. The termination of a widespread subsidized mortgage program, which had offered annual rates as low as 8%, removed a key driver of housing demand. Simultaneously, the Central Bank's tight monetary policy has made servicing the company's corporate debt significantly more expensive.

A further complication arose when the government declined to extend a moratorium on fines for construction delays. Samolet is reportedly among the market leaders in delayed housing projects, exposing it to potential new penalties. This challenging backdrop prompted the developer's management to formally request a state-backed credit line of 50 billion rubles. The appeal to authorities came shortly after the company completed a major buyback of its own bond debt.

Source: Lenta.RU