February 26, 2019 / 4:33 PM / 6 months ago

Russia's VTB says income from En+ stake to settle company's debts

MOSCOW, Feb 26 (Reuters) - Russian bank VTB will use any income it receives from its stake in Russian aluminium and power producer En+ Group to repay debt, the bank said in its quarterly financial results on Tuesday.

VTB did not say whose debts would be repaid using the income stream, but bank officials have previously said dividends received from the En+ stake will go towards paying off the debt owed to it by En+ itself.

The statement on Tuesday clarified the bank’s strategy for dealing with the stake, which it increased in January to 22 percent as part of a complex reshuffle of En+’s shareholder structure aimed at lifting U.S. sanctions imposed on the company back in April.

After months of negotiations with the U.S. Treasury, sanctions on En+ were lifted in January, though remained in place on its principal shareholder, tycoon Oleg Deripaska.

VTB handed over voting rights for some of its shares in En+ to a third party as part of the deal. The bank denied reports that the deal would see it write off Deripaska’s debts to the bank, allowing him to escape hundreds of millions of dollars owed to VTB.

En+ owed $5.3 billion to Russian state banks VTB and Sberbank as of the end of June 2017. It has not disclosed how much it owes specifically to VTB. (Reporting by Tatiana Voronova; Writing by Polina Ivanova; editing by David Evans)

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