18 December 2025
The Russian government has instructed Russian Railways to sell a 62-story skyscraper in the Moscow City business cluster to at least partially pay off the state monopoly’s massive debt, three sources familiar with the matter told Reuters. The complex in question is the Moscow Towers complex, which Russian Railways acquired in 2024. According to RBC and Kommersant, the deal was worth 193.1 billion rubles (approximately $2.4 billion). The state-owned company could have spent its entire 2024 net profit, or 170.1 billion rubles, on the tower. Russian Railways planned to use the Moscow City skyscraper as its headquarters, and hoped to finance the purchase by selling other office properties in Moscow. However, this plan fell through.
Initially, the site belonged to the Moscow mayor’s office, but Grigory Baevsky, the company that manages the site, eventually became the owner. RBC described him as a partner of billionaires Arkady and Boris Rotenberg. They have never confirmed their involvement in the project’s purchase.
The sale of the skyscraper was discussed at a government meeting last week. According to Reuters sources, it was decided that Russian Railways should sell the building to use the proceeds to service its debt and avoid a sharp increase in freight rates. One source clarified that the company has been instructed to sell the property for no less than the purchase price.
The state monopoly has come under pressure from a multitude of factors: a slowing economy, a decline in freight traffic, and a sharp rise in borrowing costs amid the highest key interest rate in two decades. Russian Railways’ total debt is estimated at approximately $50 billion. Russian Railways previously appealed to the government for a 200 billion ruble budget allocation to plug the funding gap, but officials rejected the request, fearing similar demands from other state-owned companies.
According to Reuters, the previously discussed support measures—tariff increases, debt restructuring, direct subsidies, or tax deferrals—have not yet been approved. Another option remaining on the table is converting part of the bank’s debt into shares, followed by a buyout with financial guarantees from the Finance Ministry. However, creditors have already rejected a proposal to convert 400 billion rubles of debt into equity, according to VTB CEO Andrey Kostin.
The situation is exacerbated by deteriorating financial performance. According to Russian Accounting Standards (RAS) reporting, Russian Railways posted a net loss of 4.4 billion rubles for the first time since 2020 for the period from January to September 2025. By comparison, the company earned 44 billion rubles during the same period a year earlier. Although operating cash flow for the nine months amounted to 165.6 billion rubles, this amount was less than a quarter of investment expenditures, which reached 705.8 billion rubles. The cash gap was covered by borrowings and reserves: cash balances in accounts decreased twelvefold, from 251.6 billion to 21.7 billion rubles.
Russian Railways’ freight traffic has continued to decline since the start of the war in Ukraine. It is expected to decline by 3.9% in 2022, 0.2% in 2023, 4.1% in 2024, and another 6.7% from January to September 2025. High interest rates have led to a sharp increase in interest expenses: over the first nine months, Russian Railways spent 332 billion rubles on servicing loans. This is double the amount spent the previous year. The company has already cut its investment program by approximately a third, placed some employees on mandatory unpaid leave, and begun layoffs.
The asset strippers are moving in. No doubt putler will be getting his share too.
Good place for a new Trump Tower? 😉