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. Last Updated: 07/27/2016

RTM Could Be Country's First Broke Developer

Developer RTM has defaulted on most of its debt and could file for bankruptcy soon, its chief executive said.

It would be the first bankruptcy filing by a publicly held Russian developer.

"We have more liabilities than assets now, and that is a characteristic of bankruptcy. It is highly likely we won't be able to satisfy creditors' demands and will have to file for bankruptcy," the company's general director Sergei Khrapunov said Thursday.

Khrapunov said RTM was in technical default on $450 million of $530 million in total debt.

He said the developer was attempting to restructure debts secured by sites that continued to generate profits.

The remainder of the company's projects would likely be seized by banks, he said.

RTM failed to fulfill a put option on a eurobond in November, becoming the first Russian company to enter technical default on a foreign debt issue.

Several developers are in debt-restructuring talks and one, Sistema Hals, was sold to VTB Bank for $2, but bankruptcy filings among public companies have been all but unheard of.

Lenders say they are trying to avoid formal bankruptcy proceedings to not test the efficacy of bankruptcy laws, which are viewed as unfavorable to creditors.