Media-Most goes cold

Bank freezes accounts with $42 mil debt

MOSCOW — Russia’s Media-Most is facing financial pressure after one creditor froze company bank accounts on Nov. 2 and 3.

Dispute between Media-Most, which controls territory’s top commercial channel NTV, and state-owned Vneshekonombank (VEB) has been winding through local courts since the summer.

Current action concerns a credit line of $40 million extended in June 1998, which Media-Most has yet to repay.

Two-pronged attack

Media-Most has challenged VEB on two fronts, first claiming that the latter’s decision not to extend credit for another year broke contract conditions, then arguing that it had settled debt in defaulted government-issued treasury bills. Debt now stands at $42 million.

In its most recent decision, on Oct. 29, the court ruled in VEB’s favor, and gave the bank the right to freeze Media-Most’s accounts. Given local political factors — especially NTV’s likely political allegiances in upcoming parliamentary and presidential elections — the motivations behind the move are likely more than financial.

VEB extended a $100 million credit line to rival channel ORT, notably loyal to the Kremlin, earlier this year, but has adamantly refused to exchange its Media-Most debt for shares which it took as a pledge, as it did for ORT.