Dutch court limits DTEK receivables recovery on Sberbank claim

A district court of Amsterdam ruled on Sept. 18 to
prohibit DTEK Energy B.V. (DTEKUA) from recovering receivables from certain affiliates
and third parties, as well as engaging in any operations with the shares of its
Dutch subsidiary, the company reported in its stock exchange announcement on
Sept. 21. The company highlighted that the ruling is not expected to prevent
conducting its business and continuing its negotiations with creditors.

The court injunction was the result of Russian
Sberbank’s USD 45 mln complaint against DTEK as the guarantor of its affiliate
under a loan agreement, the company explained. Most likely, the complaint
stemmed from a failed payment of the DTEK-related, Russia-based mine
Obukhovskaya, which DTEK Energy spun off in 2016 together with a USD 436 mln
debt to Sberbank.

In its press release the same day, DTEK Energy
confirmed that it and Obukhovskaya mine are in a dialogue with creditors on a
long-term restructuring of their debts, which will be based on the principles
of respect for creditors’ rights. “We understand that in such a situation,
creditors are using all the available methods to protect their interests,” the
company’s CEO said in a press release, referring to the Dutch court’s
injunction.

Alexander Paraschiy: Taking into
account that DTEK Energy operates mostly in Ukraine, such an injunction indeed
is unlikely to affect its business. At the same time, this could undermine the
interests of DTEK Energy’s other creditors and, in the worst case, provoke a
chain reaction among some of the other groups of creditors who believe they are
senior in respect to DTEK’s debt.

In the base-case, we expect this won’t happen and
this complaint will remain a single unfriendly move of a creditor. Meanwhile,
it is strange to see that the Russian state bank is attacking a Ukraine-based
company that is struggling to operate – and willing to take all the related
risks – a mine on the territory of the aggressor-state. And DTEK is nonetheless
able to secure demand for this mine’s coal in Ukraine despite the barriers
imposed from time to time by the Russian government.