The Central Bank of Russia has quietly acknowledged growing financial distress among the country’s largest companies, identifying 13 corporations as "truly problematic" borrowers at the end of the first quarter. The Bell reviewed the financial statements of the companies most at risk of defaulting or sliding into bankruptcy on September 16.

"The combined net debt of these organisations amounted to almost RUB3.5 trillion ($37.23bn)," The Bell reported, or equivalent to 1.7% of Russia’s GDP and 6.5% of the country’s total stock market capitalisation.

Most of Russia’s leading companies are facing unsustainable debt burdens thanks to sky high interest rates and Russia’s economic problems are only getting worse recently. Earlier this year Kremlin officials admitted that one ruble in four of corporate revenges is now going to debt servicing. "All distressed companies have one thing in common: a high debt burden, exacerbated by high interest rates," The Bell wrote.

A key indicator used by the Central Bank is the interest coverage ratio (ICR), where a figure below one signals acute financial stress. Many of the troubled companies fall into this category, including several with strategic importance to the Russian state.

Chief among them is United Aircraft Corporation (UAC), a state-owned entity tasked with reviving Russia’s aviation industry. "After the war, it was given the impossible task of building 1,000 aircraft within a five-year period, a task it predictably failed to achieve," The Bell said.

Only 13 aircraft have entered service in three and a half years. The group’s total debt reached RUB2.348 trillion ($24.97bn) by mid-2025, with a debt-to-EBITDA ratio of 29.5x—far above the risk threshold of 3x.

Heavily censored financial statements, made legal by wartime disclosure exemptions, have further obscured the true scope of UAC’s liabilities. "In the 20 years since UAC's creation, the corporation's consolidated debt has increased 63-fold," The Bell noted.

Russian President Vladimir Putin is acutely aware of these problems, caused by the Western sanctions, and aviation has been amongst the Russian sectors hardest hit by sanctions as it remains heavily dependent on imports. However, the US is interested in reviving cooperation with Russia. During the Alaska summit on August 15 US President Donald Trump suggested a deal, lifting sanctions that would allow US-owned Boeing to restart business with Russia in exchange for access to Russia’s virtual monopoly on titanium, essential for plane-making. A similar deal was cut this month with Belarus, where the US lifted sanctions on the national carrier Belavia after Lukashenko released 52 political prisoners on September 11.

Another distressed firm is Globaltruck, Russia’s only publicly traded trucking company, which has been hit hard by sanctions and the exit of Western truck manufacturers.

"The company ended 2024 with a loss of over RUB1bn," after revenue collapsed by 47% to RUB10.7bn ($114mn). Share prices have plummeted 59% in 2024 and a further 12% in the first eight months of 2025,” The Bell reports.

Russian steel maker Mechel—once one of Russia’s largest mining and metals groups—is now seen as a persistent underperformer. “With these figures, Mechel will remain an industry outsider for a long time,” brokerage Tsifra Broker told The Bell. The company posted a net loss of RUB36.3bn ($386mn) last year, after a steep fall in coal prices and rising debt-servicing costs. Over 87% of its debt is ruble-denominated with floating rates, making it particularly vulnerable to Russia’s high-interest rate environment.

Oligarchs under pressure

The corporate debt troubles are affecting the wealth of almost all of Russia’s business elite. bne IntelliNews sources in Moscow say that almost all of the biggest oligarchs are short of cash. Most of the drowning men companies are controlled by prominent Russian oligarchs or individuals closely tied to the Kremlin.

The most notable is Rusal, which forms part of En+ Group, which is controlled by billionaire Oleg Deripaska, a Kremlin insider that is closely associated with Putin and the Yeltsin family.

Though Deripaska formally reduced his stake in En+ to below 50% following US sanctions in 2018, unofficially he clearly remains the driving force and primary beneficiary behind both companies. Deripaska remains under sanctions from the US, UK and EU as one of Russia’s most influential businessmen.

Mechel is controlled by Igor Zyuzin. Once a billionaire, Zyuzin has largely fallen from Russia's oligarch ranks due to long-standing financial troubles and diminished influence. Uber-oligarch Roman Abramovich and metals tycoon Alexander Abramov are also major shareholders in the company, who are also shareholders in Steel maker Evraz.

TMK (Pipe Metallurgical Company) is controlled by Dmitry Pumpyansky, another sanctioned oligarch. He was the controlling shareholder through his Sinara Group until 2022, when he transferred ownership following sanctions, but is believed to retain influence over the business.

Acron, one of Russia’s largest fertiliser producers, is controlled by Viatcheslav Kantor, a Russian-Israeli businessman who stepped down from public roles after being sanctioned by the UK and EU, but is regarded as remaining the company’s key beneficiary.

Gold miner Polymetal Russia, which emerged from the 2023 demerger of Polymetal International, has ties to industrial and banking oligarch Alexander Nesis through the ICT Group. Nesis, though not currently sanctioned, has long been part of Russia’s pre-war business elite and also owned Nomos bank which was listed in London before he sold it to Otkritie Financial Corporation a year later in 2012.

Petropavlovsk, once one of Russia’s leading gold miners and founded by UK businessman Peter Hambro, underwent significant ownership changes after defaulting in 2022, taken over by a group of oligarchs. Assets were transferred to Gazprombank-linked entities and businessman Roman Trotsenko, who has deep connections to state-controlled sectors. While not a traditional oligarch, Trotsenko is considered part of Russia’s inner economic circle.

By contrast, several companies on the list are directly state-owned or controlled through government-affiliated corporations. These include United Aircraft Corporation (UAC) and Kurganmashzavod, both of which fall under the umbrella of Rostec, a state conglomerate focused on defence and industrial technology. Transmashholding, while technically a joint venture, is heavily influenced by state procurement and policies. Globaltruck, now owned by logistics platform Monopoly, does not appear to have oligarch connections.

One time partner of the US carmaker Ford in Russia, Sollers is now the manufacturer of Russian truck-maker UAZ and the revived Soviet-era Moskvich car brand. It is majority owned by founder Vadim Shvetsov. Though influential in the automotive sector, Shvetsov is not considered to be a traditional oligarch and is seen simply as a leading profession in the automotive sector. Similarly, OVK (United Wagon Company), now under bankruptcy protection, has dispersed ownership and has no clear controlling figure from among the traditional oligarchy.

No relief for now

Relief is not at hand, but the medium-term outlook is improving. Thanks to CBR governor Elvia Nabiullina’s unorthodox plan to artificially cool the economy, inflation is falling faster than expected. The CBR has already put in 300bp of rate cuts this year, and cut by another 100bp on September 12 to bring the key rate down to 17% with another 200bp of cuts expected before the end of the year.

However, German Gref, CEO of Russia’s largest bank Sberbank, said earlier this month that Russia was already slipping into a “technical recession” and that rates would have to fall below 12% before they could have a meaningful impact on economic recovery.

After growing strongly in 2023 and 2024 by 4.3% a year, Russian officials have downgraded the growth outlook for this year three times already and are currently predicting 1.2-1.5% of growth in 2025, with the International Monetary Fund (IMF) and Goldman Sachs predicting an even slower 0.9%. In the CBR’s latest Main Directions of the Single State Monetary Policy mid-term outlook report released on September 3 the regulator expects this year and next year will be hard, but the economy will start to recover in 2027.

Rates are coming down, but the burden on companies is likely to increase in the meantime. Short of money, thanks to continued heavy military spending and a ballooning budget deficit, the government has started to discuss increasing taxes – something it has been loath to do throughout Putin’s 25 years in office. "One option being discussed is a VAT increase," The Bell noted, warning that this would feed into consumer prices and force the Central Bank to maintain high rates.

Measures under discussion include a moratorium on bankruptcies for metallurgical companies and tax deferrals for coal miners. But as The Bell concluded, "troubled Russian borrowers will have to endure a bit longer, while the state and banks will have to find reserves to save the drowning."

The thirteen drowning men

The Bell performed the same calculations as the CBR, based on publicly available IFRS reports released by these top companies. The main results are listed below:

1. United Aircraft Corporation (UAC)

• Sector: Aviation (state-owned)
• Problem: Long-term unprofitability, impossible production targets (1,000 planes in 5 years), extremely high debt (RUB2.35tn), with net debt to EBITDA at 29.5x. Financials are censored due to sanctions laws.

Key financials (2024):

·   Revenue: RUB472bn

·   Net loss: RUB79.6bn

·   Net debt: RUB2.18tn

·   Net debt/EBITDA: 29.5x

·   Interest coverage ratio: 0.7

2. Mechel

• Sector: Metallurgy and coal
• Problem: Hit by low coal prices, high floating-rate debt (87% of total), export logistics issues, forced asset sales abroad. Ended 2024 with a RUB36.3bn loss; net debt 7x market cap.

Key financials (2024):

·   Revenue: RUB387.5bn

·   Net loss: RUB36.3bn

·   Net debt: RUB230bn

·   Net debt/EBITDA: 4.1x

·   Interest coverage ratio: 1.3

3. Globaltruck

• Sector: Logistics/trucking
• Problem: Revenue collapse (-47% in 2024), loss of RUB1bn in 2024, followed by RUB1.2bn in H1 2025. Sanctions caused parts shortages, fleet maintenance problems. Share price down 59% in 2024.

Key financials (2024):

·   Revenue: RUB10.7bn

·   Net loss: RUB1.05bn

·   Net debt: RUB4.9bn

·   Net debt/EBITDA: 3.4x

·   Interest coverage ratio: 0.4

4. Transmashholding

• Sector: Rail equipment (rolling stock)
• Problem: Major buyer (Russian Railways) reduced orders. Exports hurt by sanctions. Revenue down 41% to RUB187bn in 2024. Interest coverage ratio dropped below 1.

Key financials (2024):

·   Revenue: RUB187bn

·   Net loss: RUB17.2bn

·   Net debt: RUB175bn

·   Net debt/EBITDA: 3.9x

·   Interest coverage ratio: 0.5

5. Kurganmashzavod

• Sector: Defence manufacturing (infantry vehicles)
• Problem: Part of state-owned Rostec. Operating at a loss despite increased military orders. Debt more than doubled since 2021. No transparent data on government subsidies.

Key financials (2024):

·   Revenue: RUB44.6bn

·   Net loss: RUB5.7bn

·   Net debt: RUB24.6bn

·   Net debt/EBITDA: 7.6x

·   Interest coverage ratio: 0.8

6. Rusal

• Sector: Aluminium
• Problem: Sanctions restricted exports and payments. Revenue fell 16%, net profit dropped 90% in 2024. Interest coverage ratio close to 1. Struggling with access to international markets.

Key financials (2024):

·   Revenue: RUB826.3bn

·   Net profit: RUB13.2bn (down from RUB132.6bn)

·   Net debt: RUB509bn

·   Net debt/EBITDA: 3.3x

·   Interest coverage ratio: 1.1

7. Acron

• Sector: Fertilisers
• Problem: Fertiliser prices dropped sharply in 2024. Interest expenses rose by 50%. Net profit fell 67%. Struggling to manage debt due to global price volatility.

Key financials (2024):

·   Revenue: RUB157.8bn

·   Net profit: RUB21.4bn

·   Net debt: RUB137bn

·   Net debt/EBITDA: 2.6x

·   Interest coverage ratio: 1.2

8. En+ Group

• Sector: Energy and metals (Rusal’s parent company)
• Problem: Sanctions and internal restructuring. EBITDA fell, and debt costs rose sharply. Interest coverage ratio fell below 1. Limited capital access due to Western financial restrictions.

Key financials (2024):

·   Revenue: RUB1.19tn

·   Net profit: RUB6.3bn

·   Net debt: RUB521bn

·   Net debt/EBITDA: 3.8x

·   Interest coverage ratio: 0.9

9. Sollers

• Sector: Automotive (UAZ, Moskvich)
• Problem: Dependent on discontinued partnerships (e.g., Ford). Revenue halved after 2022. Production cutbacks, localisation challenges. Debt remains high despite state support.

Key financials (2024):

·   Revenue: RUB42.6bn

·   Net loss: RUB2.1bn

·   Net debt: RUB10.7bn

·   Net debt/EBITDA: 4.3x

·   Interest coverage ratio: 0.6

10. OVK (United Wagon Company)

• Sector: Railcar manufacturing
• Problem: Demand collapse, failed export plans. Defaulted on bond payments. Undergoing bankruptcy proceedings. Lost 80% of value on the stock market.

Key financials (2024):

·   Revenue: RUB16.4bn

·   Net loss: RUB9.2bn

·   Net debt: RUB111bn

·   Net debt/EBITDA: Negative

·   Interest coverage ratio: Negative

11. TMK (Pipe Metallurgical Company)

• Sector: Steel pipes
• Problem: Falling oil and gas investment hit demand. Revenue fell 20% in 2024. Rising debt costs and limited export options worsened liquidity issues.

Key financials (2024):

·   Revenue: RUB401.5bn

·   Net profit: RUB4.2bn

·   Net debt: RUB208bn

·   Net debt/EBITDA: 3.2x

·   Interest coverage ratio: 1.3

12. Polymetal Russia

• Sector: Gold mining (after spin-off from Polymetal International)
• Problem: De-merger and sanctions disrupted operations. Revenue fell, and profit margins declined. Access to international capital markets blocked.

Key financials (2024):

·   Revenue: RUB190.3bn

·   Net profit: RUB2.4bn

·   Net debt: RUB116bn

·   Net debt/EBITDA: 3.5x

·   Interest coverage ratio: 1.1

13. Petropavlovsk

• Sector: Gold mining
• Problem: Entered administration in 2022 after losing access to bank accounts due to sanctions. Lost primary lender (Gazprombank). Assets under receivership or sold off.

Key financials (2024):

·   Revenue: RUB40.1bn

·   Net loss: RUB10.3bn

·   Net debt: RUB63.7bn

·   Net debt/EBITDA: Negative

·   Interest coverage ratio: Negative