The FINANCIAL — One of Russia's top real estate developers, Mirax Group, has admitted it is in technical default on Eurobonds of $100 million, a Russian business newspaper reported on May 31, according to RIA Novosti.
RBK Daily said the bonds represented one fifth of the company's total debt, estimated at $500 million. The main creditor is Alfa Bank, which took on troubled developer's debt to Credit Suisse last year.
"In 2008, the company placed 1,000 Eurobonds at $100,000 each. Interest on the coupon amounted to 13.5%," the paper said, adding that payments of $6,750 on each bond were due twice a year.
"Last Friday, Mirax Group reported that the total debt of the company on May 27, 2010, amounted to $496.4 million, including $95.3 million to Alfa Bank," the newspaper said.
Mirax Group's best known project is the Federation Tower in the Russian capital's new Moscow-City financial district. The skyscraper was to be the tallest in Europe, but construction was halted by the global financial crisis and is not expected to be completed until 2016.
Company executives have said it needs as much as $250 million to finish the tower.
Analysts interviewed by RBK were skeptical of Mirax's promises to resolve its debt problems.
"In the case of a final default by the developer, the holders of CLN Mirax 2010 bonds will have to recover their investment through the sale of assets of Mirax Group," said Stanislav Bozhenko of Uralsib Financial Corporation.