Oschadbank secures arrest of Ukrtelecom stake, which it plans to sell

Oschadbank (OSCHAD), Ukraine’s largest state-owned bank,
announced on Aug. 19 that it secured the arrest of a 93% stake in Ukrtelecom
(UTLM UK), the state landline telephone monopoly controlled by ESU LLC. The
basis for the arrest was a UAH 1.8 bln debt owed to the bank by the company,
which is controlled by SCM Holdings of Ukraine’s biggest businessman, Rinat
Akhmetov. Oschadbank said it will sell this stake at auction in order to
recover its debt.

Recall, ESU had to redeem its debt (secured by the
Ukrtelecom shares) to Oschadbank in 2017, but instead asked for an extension
that was rejected by the bank. Later, ESU tried to force the bank to extend the
debt’s maturity with lawsuits, but failed.

Commenting on the issue, an ESU spokesperson told
Interfax-Ukraine that it is aware of the arrest of its shares and that it is
seeking ways to resolve the debt issue.

Alexander Paraschiy: Most likely, SCM will remain the primary shareholder in Ukrtelecom, as
it will either repay the debt to Oschadbank soon, or will buy the to-be-offered
stake at the tender. Anyway, the development is positive for Oschadbank, which
will slightly reduce its NPL as a result of its tough approach to ESU.