Conversion of some Russian Railways debt to shares was discussed, but dismissed - CEO

MOSCOW. March 18 (Interfax) - The possibility of converting part of Russian Railways' (RZD) debt into shares was discussed, but this is not a viable option right now, the company's CEO, Oleg Belozerov said in an interview with Interfax.

"A business entity must have a clear position on what steps to take at a specific moment, including in finances. We're not closing any possibilities for ourselves, and there was an idea regarding the possibility of converting part of the debt into Russian Railways shares. We took a look and the scheme is not favourable now," Belozerov said.

Other measures have made it possible to ensure RZD's financial stability, he said.

"We needed to find balance. Well, it was achieved without conversion, through rate decisions, thanks to certain subsidies and increasing efficiency within Russian Railways, including work with assets," Belozerov said.

"The action itself - conversion - is very interesting, and interesting for participants from various sides. But after a short analysis we concluded that it does not make sense to do this," Belozerov said.

He did not rule out the possibility of revisiting this option in future, but said banks were opposed to conversion.

RZD closed 2025 with EBITDA of 984.2 billion rubles, a net debt of 3.33 trillion rubles and net debt/EBITDA ratio of 3.4.

Kommersant, citing sources, reported in late December that one of the options being considered for improving RZD's finances was the temporary conversion of bank loans into company shares for up to three years, with a buyback option and guarantees from the Finance Ministry.