MOSCOW, Dec 6 (Reuters) - Russian investment group A1 has bought into defaulted Eurobonds secured by a 49% stake in Russian Standard Bank, with a view to selling on the holding once a legal battle over the bonds has ended, A1's chief executive said on Monday.
Russian Standard Ltd, which is linked to businessman Rustam Tariko, who owns Russian Standard Bank and founded Russian Standard Vodka, defaulted on a Eurobond coupon payment due in October 2017.
The bond was secured by a 49% stake in Russian Standard Bank, one of Russia's biggest private banks, and bondholders were trying to get hold of that stake to sell it later to recover at least some of their investments.
Citibank, which acts as trustee for the creditors, filed a lawsuit with a Moscow court against companies that own the bank in September last year. In January, the court dismissed that lawsuit and another court hearing is set for January 2022.
A1, part of the banking-to-retail conglomerate Alfa Group, one of Russia's top private business empires, bought a controlling stake in the defaulted Eurobond from its western holders in October, A1 CEO Andrei Elinson told reporters.
The deal should give A1 better leverage in the Russian courts as "there is no risk that the bank as a strategic entity could (come) under foreign control", he said, as Moscow is tightening rules for western companies' operations since the 2014 sanctions.
A1 has an agreement with two large Russian banks, one of them under state control, to either transfer the 49% stake in the lender to the management of one of the banks or to sell it once the legal battle is over, Elinson said.
"We hope that next year, we will get the 49% in the Russian Standard (bank) - we control enough of the notes to speak on behalf of the majority of the bondholders," he said.
Russian Standard Ltd told Reuters in emailed comments that it considers A1's agreement with two Russian banks "as another element of PR" and "A1's wishful thinking". (Reporting by Katya Golubkova; Editing by Chizu Nomiyama and Jan Harvey)
