MCG may loose Eurasia tower

2012-01-20



Demoginet Limited of Cyprus and allegedly affiliated with Nafta Moscow, has won a lawsuit against the company Tekhnoservis – a subsidiary of the developer MoscowCityGroup (MCG) currently developing Eurasia Tower office complex in the Moscow City business centre. The developer is to repay the creditor RUB 5bn (€125m) and transfer the asset pledged against the loan.
Tekhnoservis was set up as a joint venture of MCG and Eurasia Group controlled by a Kazakh businessman Mukhtar Ablyazov who fled the country after being prosecuted for an alleged €3.4bn fraud. Tekhnoservis secured a €357m credit facility from Sberbank but drew only RUB 5bn (€125m). Later Sberbank stopped financing the project, allegedly as a result of the situation around Mr. Ablyazov. MCG consolidated 100% of Tekhnoservis having purchased Mr. Ablyazov’s share for €34m and at some point the company stopped serving the debt. The bank first filed a lawsuit against the borrower but later sold the debt to the Cyprus company. The MCG is in negotiations with the new creditor to restructure the debt but simultaneously is in discussions with two undisclosed investors about their joining the project.