Russia's largest shipping group forced to sell up to one-third of its ships to repay loans ahead of a Western sanctions deadline, report says

• A big Russian shipping firm wants to sell a third of its ships ahead of sanctions, per Lloyd's List.
• The EU and UK have given banks until May 15 to cut ties with Sovcomflot.

Russian shipping firm Sovcomflot is planning to sell up to one-third of its vessels to pay back loans before Western sanctions come into effect, Lloyd's List reported on Monday.

Sovcomflot has been in negotiation talks with clientele from Dubai and China about selling at least 40 of its 121 ships, a senior industry official familiar with the deals told Lloyd's List.

The European Union and the UK have imposed various sanctions against Russia — one details that banks must cut all transactions to Sovcomflot after May 15. The shipping giant has to send all unpaid loans to the relevant banks and financiers before May 15.

This has prompted Sovcomflot to put around a third of its vessels on the market, Lloyd's List reported.

"All banks and charterers have until May 15 to actually terminate the contracts, which means Sovcomflot has a very short window to pay back the loans and realistically there is only one way it can do that and that is to sell the ships," a senior banker, who is negotiating terms with Sovcomflot, told Lloyd's List.

The senior industry official told Lloyd's List that eight of Sovcomflot's ships have already been sold — ship management company Koban Shipping has bought four of them, the source added. Koban Shipping didn't immediately respond to Insider's request for comment made outside of normal working hours. Buyers in China were also involved in several deals that are nearly completed, the industry official told Lloyd's List.

Sovcomflot didn't respond to Insider or Lloyd's List requests for comment about the ship sales.

It comes as the EU proposes more sanctions on Russia, including a ban on Russian oil imports with plans to phase out crude within six months.