Segezha Group Closes a 113 Billion Rouble Share Issue and Cuts Its Debt Threefold

Segezha Group, the largest player in the forest industry complex of Russia by leased forest area, has completed the placement of additional shares, raising 113 billion roubles from AFK Sistema (АФК «Система»), several creditor banks and outside investors instead of the planned 101 billion. The proceeds go to repaying loans and accumulated interest, cutting the holding's debt threefold to about 60 billion roubles, Kommersant (Коммерсантъ) reported on June 2, 2025.

The mechanics of the placement

The additional issue was approved by the board of directors in November 2024 and sold by closed subscription at 1.8 roubles per share, in a volume of up to 62.76 billion shares. Before the issue, Segezha's charter capital consisted of 15.69 billion shares, of which AFK Sistema held 62.2%, top managers 4% and 24.25% was in free float. "The additional issue has been completed in full - all shares provided for by the placement decision have been successfully placed among investors," Segezha Group said, adding that the money raised will go entirely to repaying the group's loans and accumulated interest. Net debt at December 31, 2024 stood at 147.9 billion roubles, with net debt to OIBDA over the last twelve months at 14.8x; as a result of the issue, debt including repaid accumulated interest will fall threefold to 60 billion roubles. "Thus the company will substantially reduce interest payments, will be able to focus on development and will subsequently reach operating profit," the holding said.

Who bought the shares

AFK Sistema took part in the issue and kept its controlling stake; a number of outside investors also participated, including key creditors. A Kommersant source explains that not all banks bought shares; Segezha Group's main creditors are Sberbank (Сбербанк), VTB (ВТБ), Alfa-Bank (Альфа-банк) and MKB (МКБ). Initially the placement was designed to raise up to 101 billion roubles, but the issue parameters allowed the sum to grow to 113 billion in the process. AFK Sistema said the additional issue was taken up in full based on the company's debt repayment needs and investor demand, and that the deal will let Segezha Group continue "moving forward", with all preconditions in place for high and stable operating results.

The April agreement behind the deal

A repayment calendar: the 113 bln rouble issue directs proceeds to loans and accrued interest

The placement closes a restructuring scheme discussed since spring. In April 2025, Industry and Trade Minister Anton Alikhanov (Антон Алиханов) told a presidential meeting with government members that the scheme for restructuring Segezha Group's debt burden had been agreed with the owners, creditor banks and the central bank. The holding itself occupies a systemic place in the industry: it leases 15.2 million hectares of forest fund, and in 2024 increased roundwood harvesting by 18% to 8.6 million cubic metres, paper output by 12% to 360,000 tonnes, sawn timber by 10% to 2.3 million cubic metres and birch plywood by 6% to 183,000 cubic metres. Revenue rose 15% to 102 billion roubles and OIBDA 8% to 10 billion, while the net loss for the year reached 22.3 billion roubles.

What the market watches next

Whether the threefold debt cut translates into operating profit, as the holding promises, or whether interest savings are absorbed by the weak market.
The dilution effect for minority shareholders, which Alfa-Bank analysts flagged as substantial given the size of the placement.
External conditions named by WhatWood consultant Igor Novosyolov (Игорь Новосёлов): the demand-supply balance, price conditions, transport costs and the global economy, on which Segezha's medium-term stability will largely depend.
Whether keeping Segezha operational, which Novosyolov calls a source of "at least some stability" for the forest industry complex, holds through the next downturn in export markets.

Experts quoted by Kommersant treat the preservation of Segezha Group's operations as a good sign for the industry as a whole, while stressing that the group's further indicators will depend on the situation in export markets. The 113 billion rouble issue removes the most acute balance-sheet pressure of 2024-2025; it does not remove the price cycle that produced the losses.