The Russian government’s attempt to sell a majority stake in the country’s third-largest gold producer has collapsed after no bidders came forward, underscoring the challenges of monetising assets seized from sanctioned oligarchs. The auction for a 67.2% stake in Yuzhuralzoloto Group of Companies (YUGK), valued at 140.4 billion rubles ($1.9 billion), was declared invalid after a two-week bidding window closed without a single offer. The asset was nationalised last July from billionaire regional lawmaker Konstantin Strukov, who was accused of illegally controlling the company through his government position. Viewed from Moscow, the failure reflects both a lack of investor appetite for assets mired in legal ambiguity and the broader economic uncertainties weighing on Russia’s commodity sector.

Compounding the state’s difficulties, an arbitration court in Chelyabinsk has now ordered the write-off of 17 billion rubles in debts that YUGK’s management company owed to Strukov. The court accepted the company’s argument that the loan agreement was a sham transaction, effectively eliminating a liability that would have reduced the asset’s net value. Analysts in London note that the timing is strategic: by clearing the debt before a reduced-price repeat auction, the state hopes to make the gold miner more attractive to buyers. The re-sale, scheduled for late May, will start at a lower price, though the earlier lack of interest suggests deeper structural problems, including fears of future lawsuits from Strukov or other stakeholders.

The pattern of faltering state asset sales is not limited to natural resources. Russia’s state railway monopoly, RZD, recently failed to sell a massive office complex in the Moscow City business district. The auction for Moscow Towers, a 63-storey skyscraper that RZD bought for 193 billion rubles in 2024, attracted no bidders despite a starting price of 280.8 billion rubles. The property includes hundreds of apartments, offices, and parking spaces, but the combination of high price and uncertain demand in a stagnant real estate market proved fatal. Meanwhile, new-build apartment prices in Moscow have continued to climb—up 27% year-on-year to 539,000 rubles per square metre—even as buyer interest has dropped 31%, with developers holding the line on pricing in anticipation of future supply shortages.

The string of failed auctions raises questions about the state’s ability to recoup value from seized assets, a policy that has accelerated since the invasion of Ukraine. With President Vladimir Putin set to visit China in the coming days, analysts expect discussions to touch on investment opportunities for Chinese firms in Russian nationalised industries. But the lack of domestic and international interest in the YUGK stake suggests that even deep discounts may not be enough to attract buyers wary of legal risks and a volatile business climate. The next few weeks, including the repeat gold auction and the potential sale of other state-held properties, will test whether Moscow can turn its seizure strategy into hard currency.