Ex-owners of Privatbank to sue Ukraine in local court

Cyprian SPV Triantal Investments filed claims in Kyiv Administrative Court against all the parties that were involved in the bailout and nationalization of Privatbank, epravda.com.ua news site reported on May 29. The claims were filed against National Bank of Ukraine, Deposit Guarantee Fund, Cabinet of Ministers and State Securities Commission. The subject of the claim is unclear from the available documents. Triantal, controlled by Igor Kolomoisky and Gennadiy Bogolyubov, owned a 16.8% stake in Privatbank before its nationalization. The court is going to consider the case on July 27.

Privatbank was declared insolvent on Dec. 19 and nationalized on Dec. 21. Between these events, the Deposit Guarantee Fund, based on information provided by the NBU, converted (bailed-in) UAH 29.4 bln of the bank’s liabilities into equity. This amount included all the bank’s Eurobonds (PRBANK) and deposits of related parties. After that 100% of the bank’s equity was transferred to Finance Ministry. On May 17, the same Kyiv Administrative Court ruled to question the bail-in of about UAH 1.06 bln in Privatbank obligations to the Surkis family, according to Ukrainian media.

Alexander Paraschiy: Most likely, the former owners of Privatbank will try to question the bailing-in of some of their funds.The development, so far, is neutral for Eurobond holders, who are yet to file their court claims against the bail-in process.

Also, the former shareholders may try to question some of their obligations that were left after the nationalization of Privatbank – according to what we heard from the NBU in December 2016, the regulator will demand repayment of some of loans provided by the bank to its former shareholders, in the amount of up to UAH 76 bln. The initial deadline for the return of such loans is end-1H17, as was claimed by the NBU. Attempting to recover related party loans of Privatbank was also among the commitments of the Ukrainian government taken to the IMF. In our view, it is very unlikely that the government will succeed in recovering any of the money from the former shareholders.