Frankfurt The Severstal steel group has become the first Russian company since the beginning of Russia’s war of aggression against Ukraine not to pay investors interest. Severstal should have paid $12.6 million on an $800 million bond issue by midnight Wednesday, but that didn’t happen.

The payments would have been due on March 16 – but the bond terms provided for a five-day grace period. That has passed. The price of the corresponding bond has collapsed to just five percent of the nominal value of 100 percent.

The group has plenty of cash, and its founder and main owner Alexey Mordashov is the richest man in Russia with an estimated fortune of $29 billion.

But Mordashov is on the list of oligarchs against whom the western world has imposed sanctions. According to information from the Bloomberg news agency, this now prevents the London subsidiary responsible for processing, US bank Citi, from passing on the interest to investors.