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. Last Updated: 07/27/2016

Finance Ministry Joins List Of Angry MOST Creditors

The debt noose around Media-MOST tightened this week with the powerful Finance Ministry joining the group of creditors seeking their money back.

The ministry’s move apparently leaves the Moscow city government as the only creditor patiently waiting for its loan to be repaid.

Before Tuesday only banks or companies with state participation — Vneshekonombank, Gazprom and Sberbank — had filed claims against Media-MOST. Now it is the state’s turn.

The ministry’s claims are for guarantees paid on a loan made by the U.S. Export-Import Bank, said Deputy Prime Minister and Finance Minister Alexei Kudrin.

"The first tranche of the guarantees is for $140 million," Kudrin said. Vneshekonombank has been instructed to establish whether other claims against Media-MOST have been made, he said.

Vneshekonombank said a $30 million suit had been filed with the Moscow arbitration court against closed joint stock company Bonum-1, which is wholly owned by Media-MOST subsidiary NTV-Plus. The claim amount is the same as that previously transferred by the Finance Ministry to Ex-Im Bank.

Vneshekonombank said that in 1997 and 1998 the Finance Ministry, Bonum-1 and Vneshekonombank signed four loan agreements for a total of $142.5 million, which was to have been used to pay off a loan made by Ex-Im bank to Bonum-1 for the production and launch of a TV satellite. But, as of Jan. 18, Bonum-1 terminated its obligations under all four agreements without paying back the principal debt, interest payments and insurance commission to the Finance Ministry.

No one is really sure how much Media-MOST is worth, but there is no disagreement on how much it owes. Gazprom-Media’s claims against MOST total $473 million, with another $40 million due to be paid by the end of the year on a loan issued by Gazprombank to NTV. MOST owes more than $100 million to Sberbank, $220 million to the Moscow city government, and Vneshekonombank says it is owed $63 million.

Counting the $142.5 million from Ex-Im Bank guaranteed by the Finance Ministry, the total amount of debt of varying types and with various repayment dates comes to about $1 billion.

TPG Aurora, the financial adviser regulating Media-MOST’s debt to Gazprom, says Media-MOST is worth between $500 million and $700 million. But Media-MOST’s management values the business at $2 billion.

Before the financial meltdown in 1998, and before relations with its creditors soured, western assessments of Media-MOST were between $1.6 billion and $2 billion.