Supreme court confirms Ukrainian Railways' obligations to VR Global for USD 58 mln

Ukraine’s supreme court confirmed the obligations of
Ukrainian Railways (RAILUA) to VR Global Partners in four litigations,
Interfax-Ukraine reported on April 28 citing a VR Global press release.
According to the court decisions database, the Supreme Court ruled on April 20
to confirm the decisions of lower-tier courts on four cases, thus having
confirmed the obligations of Ukrainian Railways to repay a total of USD 46.0
mln of loans and pay a total of UAH 332 mln (USD 11.8 mln equivalent) in penalties
to VR Global Partners.

According to the court decisions database, there are
two more cases with decisions of appellate courts obliging Ukrainian Railways
to repay USD 78.5 mln of debt and pay UAH 87.5 mln of penalties to VR Global
Partners. Therefore, the total potential obligations of Ukrainian Railways to
VR Global Partners – confirmed by appellate or supreme courts – amount to USD
140 mln.

Recall, VR Global Partners purchased the debtof Ukrainian Railways to Prominvestbank in March 2019. The total par amount due
under such debt was about USD 153 mln.

Alexander Paraschiy: This is another headache of Ukrainian Railways, in addition to an
obligation to repay USD 116 mln debt to Sberbank-Ukraine by end-May 2021, as
was highlighted by S&P Global Ratings last week. However, unlike the Sebrbank debt,
Ukrainain Railways can delay the payment to VR Global Partners without
immediate negative consequences like cross-default. Remarkably, the company’s
financial plan for 2021 does not foresee any repayment of the Prominvestbank/VR
debt.