Bakhmatyuk asks NBU for equal treatment with ex-owners of Privatbank

Oleg Bakhmatyuk, a key owner of Ukrlandfarming (UKRLAN) and Avangardco (AVINPU), accuses the central bank of Ukraine (NBU) of using a double standard in its treatment of him, as the owner of two failed banks, versus the former owners of Privatbank, he told Interfax-Ukraine on Feb. 2. He called on the NBU head to comment on why the owners of Privatbank have half a year to restructure their debts to the bank and ten years to repay them, while Bakhmatyuk is not allowed to repay his debt over seven years.

Earlier the same day, the new CEO of Privatbank announced that approximately UAH 155 bln debt of former bank shareholders will be restructured for ten years with quarterly repayments. The restructuring of the debt is to be completed by July 1, 2017. The bank was recognized insolvent and then nationalized in late December, 2016.

Commenting on the possibility of restructuring Bakhmatyuk’s debt, NBU deputy head Kateryna Rozhkova said in an interview to lb.ua published on Feb. 6 that current legislation does not permit the restructuring of the loans of failed banks. 

Bakhmatyuk had two banks, VAB and Finansova Initsiatyva, that were declared insolvent in November 2014 and June 2015, respectively. They are now controlled by the Deposit Guarantee Fund. As Bakhmatyuk earlier claimed, his two failed banks owe UAH 20.6 bln to the NBU and Deposit Guarantee Fund. The NBU claimed that Bakhmatyuk owes a total of UAH 37.9 bln to state entities and depositors of his banks.

Alexander Paraschiy: The government’s wish to restructure the liabilities of the former Privatbank owners over ten years does indeed create a valuable precedent for owners of other failed banks. And given the readiness of the head of the Deposit Guarantee Fund to agree on the long-term restructuring of Bakhmatyuk’s debt, it looks like a solution could be found. This, however, does not greatly change the situation with Bakhmatyuk’s farming assets, Ukrlandfarming and Avangardco, which have debts that are too high to service smoothly. Therefore, we maintain our bearish view on the bonds of the two companies.