2 Min Read
* Default triggered by asset freeze as part of Rosneft lawsuit
* Sistema says services all debt on time and in full
* Does not expect creditors to demand early repayment
MOSCOW, July 17 (Reuters) - Russian conglomerate Sistema said on Monday it had run into a technical default on 3.9 billion roubles ($66 million) of debt due to an asset freeze as part of its legal dispute with oil company Rosneft.
The default, which is due to non-compliance with certain conditions of some of its credit facilities, is purely formal in nature and Sistema continues to service its obligations in a timely manner and in full, it said in a statement.
Under the terms of the loans in question, a freeze of more than $25 million worth of Sistema assets triggers a default unless the freezing injunction is lifted within 21 days, Sergei Kopytov, a spokesman for Sistema, said.
"We do not anticipate creditors to demand early repayment of these loans because Sistema services and plans to service all its obligations on time and in full," Kopytov said.
Sistema's Moscow-listed shares were down 3 percent in early trade on Monday, underperforming the broader market index, which opened 0.5 percent higher.
State-controlled Rosneft is suing Sistema for 170.6 billion roubles in damages following its purchase of oil producer Bashneft last year. Rosneft alleges some assets were removed from Bashneft. Sistema has rejected the claims.
An arbitration court has frozen more than $3 billion of Sistema's assets, including a part of its stake in mobile operator MTS , as part of interim measures while considering Rosneft's lawsuit.
The next court hearing is scheduled for July 19. ($1 = 59.1420 roubles) (Reporting by Maria Kiselyova; Editing by Dmitry Solovyov and Louise Heavens)