"Daughter" of the United Carriage Company provoked a collapse of the company's bonds. Actions to resolve the situation.
It was enough just to mention a possible technical default threatening OVK-Finance, as the Moscow Exchange reacted almost instantly with a fall in the value of bonds by 11.7%. A possible default was announced on November 24, and by the middle of the day on November 25 UWC bonds were already trading at a price of 87.5 rubles apiece, but then rose slightly. And yet, the fall in value has become significant.
And this despite the fact that OVK-Finance stated that it does not directly affect the activities of the parent company and is not capable of creating risks for it. However, these assurances failed to prevent the collapse of bonds. OVK-Finance is part of the United Carriage Company and it is not surprising that the news about its technical default was taken negatively and with caution.
However, default has not yet been declared and is not the only possible outcome of the situation with OVK-Finance, although the problems of the latter cannot be called easily solved. On November 24, the company had to pay off its investors (the amount was about 16 billion rubles), but could not fulfill its obligations. The bonds were placed in 2013 in the amount of 15 billion rubles, and in 2021 the par value and coupon payments matured. The reason for the non-fulfillment was named by OVK-Finance itself - the lack of finance. The subsidiary of the United Pipe Company has confirmed the right of its investors to apply for funds to the issuer and guarantors, but in the current period the obligations cannot be fulfilled by OVK-Finance.
It is already known that the company's shareholders are taking steps to resolve the situation and agree on the possibility of debt restructuring. UWC's main shareholder is the Trust bank (also referred to as the "bank of non-core assets"), which, in turn, belongs to the Central Bank of the Russian Federation. He owns almost 30% of UWC shares, and almost 25% belongs to Otkritie Bank, which is also owned by the Central Bank of the Russian Federation.
The financial problems of OVK-Finance, which was created to attract investment for the United Pipe Company, became known back in the middle of the year. The creditworthiness of the company, as well as UWC itself, is regarded as low, as their debt burden is high, while the need for railcars remains small. However, the Central Bank of the Russian Federation urged not to consider both companies as state-owned, since Trust Bank also works with non-core assets and unforeseen situations may arise in this market.
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