GAZ has failed to buy back bonds of its only outstanding 5 billion rouble bond issue.
Business daily Vedomosti reported that Pavel Sokolov, managing director of the group’s payment agent Troika Dialog, described it as a ‘technical default’ because GAZ failed to transfer the money to Troika.
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Bondholders offered 4.5 billion roubles worth of bonds to the issue, a source close to GAZ Group said.
GAZ Group is selecting a bank to hold negotiations with bondholders, according to another source close to the automaker.
GAZ Group hopes to buy back the bonds in a month or agree with bondholders on restructuring the debt, the source said. GAZ Group has also registered four future bond issues worth a total of 20 billion roubles and hopes to get 10 billion rubles in government guarantees.
