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. Last Updated: 07/27/2016

UralSib Files $34M Suit Against Glavstroi

UralSib on Friday filed lawsuits against Glavstroi, the builder that is part of Oleg Deripaska’s Basic Element holding company, seeking more than 1 billion rubles ($34 million).

The investment bank filed two suits against Glavstroi at the Moscow Arbitration Court. The first, for 422 million rubles, was filed against several Glavstroi subdivisions, including Glavstroi Exploitation and Mospromzhelezobeton and Glavstroi Corporation. The second suit, for 630 million rubles, was filed against Glavstroi Corporation and BKSM.

UralSib gave Glavstroi two credit lines last year, for 400 million rubles and 600 million rubles. When the loan became due in February, the two sides agreed on a three-month extension.

To pay off the loan, Glavstroi planned to give UralSib a property in the southwestern part of the city, one of the builder’s creditors said. A source close to Glavstroi said the property was Mechanical Factory No. 2, located on Krzhizhanovskaya Ulitsa, a 2.7-hectare property that is 76 percent owned by Basic Element.  

Over the summer, sources at Glavstroi and close to UralSib confirmed that the deal was close to being sealed.

But when the factory’s minority shareholders became aware of the proposed sale, “they began to dispute the deal, and the talks became bogged down,” said a source close to one of the sides.

“We hope to iron out problems with all of our main creditors by the end of the year. Talks are ongoing,” Glavstroi spokesman Vitaly Korolyov said.

UralSib refused to comment for this story.

Glavstroi has settled debts using real estate before.

In the spring, the company reached an agreement with the Bank of Moscow to settle a 4 billion ruble debt by giving the bank its 127,000-square meter Podolskiye Prostory project. The builder is also in talks with VTB on settling its 3.2 billion ruble debt to the bank, two-thirds of which could be paid with shares in the builder’s Michurinsky project.