Sistema-Hals has clarified its debt position in response to press speculation that the Russian developer needs to refinance large debts.

In a stock exchange announcement made today, Sistema said that only $20m (£11.6m) of its total $1.2bn (£697m) debt, needs repaying before the end of the year. It said $700m (£406m) of the debt would not need repaying until 2012.

The company said its ‘immediate priority was not servicing its debt but financing its construction programme.’

However it added: ‘Sistema-Hals continues to look at possible strategic partnerships for a number of its most capital-intensive projects in case of further deterioration of the market situation.’

The company is to undertake a review of its business and will announce the findings in November.

Sistema’s statement comes at a time of negative sentiment towards Russian property investment. At the end of last month, the company was highlighted alongside fellow Russian developer Mirax as needing to raise cash through asset sales as the credit crunch continues to strangle funding sources in the country.

Sergei Shmakov, president of Sistema-Hals, said: ‘The global liquidity crisis which is affecting markets around the world, including the Russian real estate sector, has necessitated a prudent review of the priorities in our investment programme.’

‘Taking a pragmatic approach, we are analysing different scenarios of further evolution of the market conditions and developing appropriate action plans, based on the company’s competitive advantages - such as scale of business, diversified portfolio of high quality projects, alternative sources of financing and experience of the new management team.’

‘Given the attractive, long term fundamentals of the Russian real estate market, and Sistema-Hals’s key strengths, we believe that the company is well placed to ride out current market turbulence and continue its development in a medium term perspective.’