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. Last Updated: 07/27/2016

ORT Likely to Get Reprieve on Overdue $100M Loan




Pro-Kremlin state-owned ORT television will likely receive a grace period on a $100 million loan that fell due Jan. 28, the head of the state-owned bank that granted the loan said Tuesday.


After ORT missed the deadline to repay the debt - granted against collateral of a 15 percent stake in the television channel - a final decision on whether or not to call in the loan was still pending, Vneshekonombank chairman Andrei Kostin said, in remarks reported by Prime-Tass.


But the final decision is not one for the bank to make, a Vneshekonombank spokeswoman said Tuesday.


"The bank was simply an agent. The loan was given out in accordance with a presidential order," said the spokeswoman, who declined to be identified. A decision on the payment deadline "doesn't depend on the leadership of the bank."


The loan was disbursed last year at the order of President Boris Yeltsin, at a time when ORT was facing a bankruptcy suit widely viewed as an attack by the Moscow government on the station's reported controller, Boris Berezovsky.


However, it is unclear upon whom a decision does depend regarding the loan. Both the Vneshekonombank spokeswoman and ORT spokesman Grigory Simanovich said they were unaware if presidential approval was required.


Simanovich declined to say why ORT missed the debt payment, adding that the channel's leadership would only know whether they were off the hook at the end of the week.


Members of the non-state media have accused the presidential entourage of using the state-controlled bank as a political tool to grant special financial privileges to ORT, a pillar of media support for the Kremlin, and punish channels that don't toe the line.


The government owns 51 percent of ORT, but Berezovsky, a financier with tight Kremlin connections, is believed to control the channel. It was unknown whose shares were transferred to Vneshekonombank as collateral for the loan.


Around the time the loan was extended, Vneshekonombank moved to call in a $42.2 million debt held by ORT rival NTV television, which features critical coverage of the Kremlin.


After its attempt to pay the debt with illiquid MinFin bonds - for which Vneshekonombank is the payment agent - was rejected, NTV's owner, Media-MOST, announced last month it would pay off the loan and subsequently sold off minority stakes in NTV and its sister channel THT to outside investors.


ORT has suffered cash crunches in the wake of the 1998 crash, first when ad revenues fell in the wake of the ruble devaluation and again in December 1998, when the State Audit Chamber ordered the channel's accounts frozen after it refused to submit to an audit.


Despite continued pressure from the audit chamber - a government watchdog body set up by the State Duma - Vneshekonombank has acted to stave off any audit by both keeping ORT's accounts open at the bank and declining to give the watchdog access to records from those accounts.