Mirax Denies Suggestion of Liquidity Problems

Real estate developer Mirax has denied any liquidity problems after a report by the Fitch credit rating agency raised concerns about banks' exposure to the red-hot local property market.

The Fitch rating agency last week reiterated its "rating watch negative" for Mirax, citing heightened concerns over its liquidity position.

Mirax deputy CEO Alexander Paperno said in a statement that because of a legal restructuring, all the assets belonging to Mirax Group have been consolidated in a new company, Mirax Group Holding.

"The decision by Fitch to place our ratings in the negative watch list is linked to this fact," Paperno said, adding that Mirax Group liabilities were fully backed by the new holding company.

"There will be no worsening for our obligations' holders, once certain procedures are completed, it will become clear to everyone, including Fitch," Paperno said.

Fitch said Mirax's short-term debt had grown by $417 million to $454 million over the past 12 months, representing 54 percent of the company's total debt, while Mirax had not increased back-up liquidity reserves accordingly.

Mirax, which is involved in high profile projects such as the Federation Tower in the Moskva-City development, is not publicly traded and has put its initial public offering plans on hold.