Home
/
News
/

Ukraine injects UAH 107 bln into Privatbank equity in December

Ukraine injects UAH 107 bln into Privatbank equity in December

5 January 2017

Ukraine’s Finance Ministry contributed UAH 107 bln into the equity of Privatbank (PRBANK) in December, the bank’s press service reported on Jan. 4. Out of this amount, MinFin contributed UAH 43 bln in local currency bonds and UAH 64 bln in bonds whose par value is linked to U.S. dollars (so-called index bonds), the finclub.net news cite clarified, citing sources in the bank. The index bonds will “secure the liquidity of the bank’s foreign currency liabilities,” the press service reported. The positive results of the recapitalization leads the bank to expect boosted credit agency ratings, the statement said.

Recall, Ukraine’s central bank recognized Privatbank insolvent on Dec. 19, claiming its capital gap is UAH 148 bln. As part of the bank’s resolution, the bank’s interim administrator (the State Deposit Guarantee Fund) converted the bank’s liabilities to related parties and Eurobonds — at a total amount of UAH 29.4 bln — into the bank’s equity.

Afterwards, 100% of the bank’s equity was sold by the Fund to the Finance Ministry for UAH 1, thus having completely diluted the bank’s Eurobonds holders. According to the National Bank’s initial plan, the bank’s capital gap will be filled by bailed-in creditors (at UAH 32 bln), the bank’s former owners (at up to UAH 76 bln) and the Finance Minstry (at least UAH 43 bln, or up to UAH 117 bln, if the former owners contribute less than expected).

Alexander Paraschiy: MinFin’s injection of UAH 107 bln into the bank’s equity (of a total planned cap of UAH 117 bln) suggests the government expects no contribution into equity from the bank’s former owners (or no more than UAH 10 bln of the planned UAH 76 bln). In essence, the government has forgiven the former owners about UAH 150-160 bln that they owe to the bank, based on NBU estimates.

In which case, the bank’s former owners (among them Igor Kolomoisky and Gennady Bogolyubov) are the main winners of the nationalization. Among all the bank’s creditors, the only losers are non-affiliated Eurobond holders, which have lost so far 100% of their investment. In our view, they still have a good chance to recover their value (refer to our note of Dec. 27), though such a recovery won’t be easy. 

 

Latest News

News

23

02/2022

Separatists may claim entire territories of two Ukrainian regions

Russia has recognized “all fundamental documents” of the self-proclaimed Donetsk and Luhansk People’s Republics (DNR...

News

23

02/2022

U.K. to provide USD 500 mln loan guarantee for Ukraine as IMF mission starts

The British government is going to provide up to USD 500 mln in loan guarantees...

News

23

02/2022

MinFin bond auction receipts jump to UAH 3.5 bln

Ukraine’s Finance Ministry raised UAH 3.3 bln and EUR 7.2 mln (the total equivalent of...