Sistema-Hals, one of the biggest real estate companies in Russia, has clarified its debt position in response to press speculation that the Russian developer needs to refinance large debts.

The Board of Sistema-Hals wishes to clarify that Sistema-Hals currently has $1.2bn of debt of which only around 20% is short-term debt, approximately $20m of which falls due for repayment before the end of 2008. Repayment terms for most (c. $700m) of the long-term debt extends to 2012.

Sistema-Hals’ immediate priority is not servicing its debt but financing its construction program. The company is currently finalising its strategy, action plan and budget for 2009 developed in response to the current market conditions. The final strategy is due to be announced in November following its approval by the Board of Directors in late October.

Sergei Shmakov, President of Sistema-Hals, said: “The global liquidity crisis which is affecting markets around the world, including the Russian real estate sector, has necessitated a prudent review of the priorities in our investment programme. Given the attractive, long term fundamentals of the Russian real estate market, and Sistema-Hals’ key strengths, we believe that the company is well placed to ride out current market turbulence and continue its development in a medium term perspective.”