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VR Rescues Sm6 Trains After Russian Railways' Financial Shortfall

VR Rescues Sm6 Trains After Russian Railways' Financial Shortfall
foto: VR Group / Public domain/Allegro
15 / 12 / 2023

The trains known as Allegro, or Sm6 units, have been owned by a joint venture between VR and Russian Railways. The Russian owner has repeatedly neglected its financial obligations towards the joint venture. VR redeemed the joint venture's loans and through the right of pledge took possession of the trains on December 14th. The trains are expected to be put into service in domestic long-distance traffic in Finland around the year 2025.

Russian Railways (RZD) has failed to meet its financial obligations regarding the joint venture Oy Karelian Trains Ltd's loan liabilities and taxes. Negotiations between the parties lasting over one and a half years did not yield results, and in June 2023, the joint venture could no longer pay its loans to financiers. Karelian Trains faced the threat of bankruptcy. To avoid the bankruptcy of the joint venture, VR has redeemed the loans of Karelian Trains and obtained the right of pledge as security for the loans from Finnish financiers who funded the trains.

On December 14th, VR exercised its right of pledge, transferring four Sm6 trains into the company's ownership. VR intends to deploy the trains to meet the growing demand for long-distance traffic in Finland starting from 2025. 

Finn Møller / Flickr

"The number of passengers on our long-distance routes is increasing, and new rolling stock is needed. The Sm6 trains are high-quality, modern trains that will support the growth of domestic traffic. We will carefully assess on which routes the trains will best serve our passengers," says VR's CEO Elisa Markula. 

Plans for the Sm6 trains will be further detailed later, including their name, service concepts, and routes. 

The commissioning of the trains requires technical inspections and maintenance work 

The Sm6 trains have been unused for over one and a half years at VR's depot since the cessation of traffic to Russia, and their commissioning requires technical inspections and maintenance work. 

"Getting the trains ready for service is estimated to take about a year, as they have not received necessary maintenance or spare parts have not been ordered due to the unclear situation of the joint venture. The popularity of domestic long-distance traffic and the number of passengers is increasing, which will require future investments in rolling stock to ensure our competitiveness. The Sm6 trains provide one solution to this," says Markula. 

Source: VR Group

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