Russia's largest shipping company is selling ships to buyers in Dubai and Singapore to repay its debts to western banks, a report says

Russia's leading shipping company has sold ships to buyers in Asia and the Middle East to repay their loans.

The story was first reported by the Wall Street Journal.

Sovcomflot sold five tanker ships to Koban Shipping and four natural-gas carriers to Eastern Pacific Shipping.

The company is trying to comply with the European Union's sanctions against Russia.

Banks will need to disburse outstanding loans before the deadline. According to the latest data, Sovcomflot had as much as $2.1 billion of debt.

The journal reported that Chinese buyers are interested in acquiring vessels and are in negotiations.

Insider requested comment from Sovcomflot outside normal working hours.

The company said in a release that it would repay its Eurobond. The company had two outstanding Eurobond issues, totaling $928m.

The WSJ reported that Eastern Pacific paid $700 million to a bank to take ownership of the ships.

The company was reported to be looking to sell as much as a third of its fleet.

Sovcomflot has a very short window to pay back the loans, as all banks and charterers have until May 15 to end their contracts, according to a senior bankers thought to be involved in the negotiations.

A senior industry official with direct knowledge of the deals said that 40 of the Sovcomflot's entire fleet are being discussed with buyers from the Middle East and China.

A senior banker told Lloyd's List that paying back loans before the deadline is the immediatetrigger behind the fleet sale, and it seems clear that Sovcomflot is preparing for an eventual future return to the market.

There is a calculation as to how many ships it will need to trade within the sanctions regime for the foreseeable future.