RZD may finance rail plans through public offering of shares

RZD is considering financing options for its 2025 development program, including a public offering of preferred shares, CEO Oleg Belozyorov said. “We will use the entire array of possible financial options. We even do not reject the idea of offering preferred shares in the future,” he explained.
RZD plans to construct many railways until the end of 2025, including the Northern Latitudinal Railway, and plans to invest in infrastructure, locomotives, and other fixed-capital assets. The development program includes projects totaling RUB 7.5 trillion (EUR 108.6 billion), of which RZD is to invest about RUB 5.5 trillion (EUR 79.6 billion). But the company tries to cut the share of state investment and use alternative sources, Belozyorov further explained.
“We would like to do more, but covenants limit us. We would have raised some money if we were able to increase the covenants … We have no problem with placing our financial mechanisms and raising money. But we have limitations, so we use other mechanisms. I think, we will now work out a mechanism of perpetual bonds,” he said.
Previously, the company placed RUB 50 billion (EUR 724 million) of preferred shares in favor of the National Wealth Fund, and used the money to invest in development of the Baikal–Amur Mainline (BAM) and the Trans–Siberian Railway (Transsib).