Kolomoisky says he is in restructuring talks on Privatbank loans

The former shareholders of Privatbank (PRBANK), led by
Igor Kolomoisky, are currently involved in talks on restructuring their
liabilities to the bank, Kolomoisky commented on his TV channel on July 3. The
talks with the consortium of advisors, hired by the Finance Ministry on
approval from the IMF, started in June and “will last as long as will be needed
to reach agreement,” he said. He also commented that recent statements from the
central bank (the NBU) “do not correspond to the bank’s official accounts and
distort the essence of the audit.” With that comment, Kolomoisky was possibly
referring to the fact that the official accounts of Privatbank show just UAH 10
bln of related party loans of the bank as of Dec. 19, 2016, while the NBU
alleged over UAH 150 bln of such loans. Recall, on July 2 and 3, MinFin and the
NBU issued comments that the former owners of Privatbank did
not reach any progress in restructuring of their liabilities to the bank by the
July 1 deadline.

In other news, Prosecutor General Yuriy Lutsenko
reported on July 3 that prosecutors and anti-corruption bodies are
investigating several cases related to Privatbank. The same day, the
epravda.com.ua news site listed four cases of alleged improper use of
refinancing from the NBU and provisioning of loans on non-market conditions. As
part of the investigation, the Prosecutor General arrested 759 units of
property of two companies, according to Lutsenko. In related news, the
Prosecutor General has opened a criminal case and begun investigating
allegations of driving Privatbank into bankruptcy, bank head Oleksandr Shlapak
said on July 4.

Alexander
Paraschiy: Judging from Kolomoisky’s words, it looks like he is
not going to recognize any sizeable amount of his liabilities to the bank, in
contrast to previous expectations of the NBU. Recall, in December 2016, the NBU
was expecting that former shareholders of the bank would return up to UAH 76
bln of loans or collateral by the end of 1H17, which is much more than the
amount of related party loans as presented in the bank’s annual report.

That said, we do not expect any
recovery of UAH 155.8 bln in loans that were provisioned in late December as
part of the bank’s nationalization. With the latest decision to increase the
bank’s share capital by UAH 38.56 bln, the state and the bailed-in creditors
will have contributed a total of UAH 184.8 bln to the bank’s equity, fully
covering the capital gap that emerged.