Russian Railways' Debt Dilemma Amid Economic Slowdown

Russia's government is considering measures to alleviate the debt burden on Russian Railways, a state-owned entity facing financial strain with a 4 trillion rouble debt. Discussions involve raising cargo prices or converting debt to equity to mitigate financial challenges exacerbated by the slow economy and high interest rates.

Russia is exploring options to support Russian Railways, the country's largest commercial employer, burdened with a 4 trillion rouble debt, according to insiders. The state-owned company, employing 700,000 people, grapples with declining revenues as Russia's economy slows and interest rates hit a 20-year high.

Anonymous sources reveal Moscow's plans to address the railway's debt, mostly held by state banks, through potential measures like raising cargo prices, subsidies, tax cuts, or utilizing the National Wealth Fund. Increasing cargo prices could impact Russian exporters already struggling with economic challenges.

A debt-to-equity conversion is also proposed, potentially converting 400 billion roubles into shares to save on interest payments. Final decisions remain undecided amid differing opinions among Russia's ministries, as the state navigates financial strains in its war-driven economy.

(With inputs from agencies.)