Russian Government Weighs Support for Debt-Ridden Russian Post

The Russian government is exploring support options for Russian Post, burdened by a 140 billion rouble debt. The central bank's relaxed reserve requirements could aid its debt reduction efforts. CEO Mikhail Volkov emphasized the need for systemic solutions beyond cost-cutting measures.

The Russian government is actively reviewing ways to support Russian Post amidst its significant 140 billion rouble debt, as revealed by CEO Mikhail Volkov. The intervention comes as Russian companies, including state giants like Russian Railways, face increased debt costs following a rise in the central bank's key interest rate.

In efforts to alleviate the financial strain, the central bank recently eased reserve requirements for restructured loans, potentially aiding companies with substantial debts. At a parliamentary hearing, Volkov highlighted the company's cost-saving initiatives, which include offloading non-core assets, generating an extra 50 billion roubles for Russian Post.

Volkov acknowledged that internal efficiency improvements alone will not resolve the systemic challenges confronting the postal service. Supporting this, state lender VTB has acquired a stake in Russian Post's banking division, investing 36 billion roubles. Additionally, the government is deliberating ways to bolster Russian Railways, a major employer with a 4 trillion rouble debt.

(With inputs from agencies.)