Russia’s government has instructed Russian Railways to sell a 62-floor skyscraper in central Moscow to help the state-owned railway monopoly pay down part of its $50 billion debt, three sources told Reuters. The move comes as Russian Railways, which employs around 700,000 people, faces declining revenues amid a sharp slowdown in Russia’s war-driven economy and rising interest costs, the highest in two decades.
The building, known as “Moscow Towers” and located in the Manhattan-style Moscow City complex, was discussed at a government meeting last week, according to a source who spoke to Reuters on condition of anonymity due to the sensitivity of the matter. A decision was reached that the skyscraper should be sold to avoid significant hikes in cargo transportation prices and to help manage the company’s debt burden, the sources told Reuters. Russian Railways was reportedly instructed to sell the building for no less than its 2024 purchase price of 193.1 billion roubles ($2.42 billion), as reported by Russian media including Kommersant, Vedomosti, and RBC.
Reuters noted that Russian Railways and the government did not respond to requests for comment on the decision. Analysts say that finding a buyer could prove challenging amid Russia’s slowing economy, which is projected to grow just 1.0% this year, down from 4.3% in 2024. Other options under consideration to stabilize Russian Railways, such as raising cargo transportation prices, debt restructuring, state subsidies, or postponing taxes, have not yet been finalized, a source told Reuters.
An alternative under discussion includes converting a portion of the railway’s bank debt into shares with a three-year buyback option guaranteed by the Ministry of Finance. However, Andrei Kostin, CEO of VTB Bank, Russian Railways’ largest lender, told Reuters that creditors had rejected a proposal to convert 400 billion roubles of debt into equity.
Moscow City, situated along the Moskva River, is home to major Russian companies, including VTB Bank, and government offices. Russian Railways had initially planned to relocate its central office to the skyscraper, financing the purchase by selling other office real estate in Moscow, but that plan was never implemented. The sale is now seen as a crucial step to reduce debt and stabilize the state-owned company amid ongoing economic pressures.
