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Concorde Capital Research: Court cancels decision allowing bail-in of Privatbank liabilities

April 22, 2019 | Cbonds

The Kyiv Administrative Court ruled on Apr. 18 to cancel a December 2016 resolution of Ukraine’s central bank (NBU) determining a list of related parties of Privatbank, the NBU reported on Apr. 19. That resolution listed the legal entities that fell under the bank's bail-in procedure – which involved wirting down of USD 1.1 bln of the bank’s liabilities (including USD 550 mln in Eurobonds). The bail in followed recognition of Privatbank insolvent and preceded its nationalization in December 2016.

The court ruling was based on a claim filed by its former key shareholder, Igor Kolomoisky, and his related entity, Triantal Investments Ltd. The decision grants former Privatbank shareholders the ability to reclaim their funds that were bailed in during the nationalization, the NBU stated, stressing that it was a first-tier court ruling and therefore doesn't take immediate effect. The NBU has promised to appeal the ruling.

Recall, the same court reported in its Apr. 18 press release that it ruled to cancel the sales-purchase agreement based on which Privatbank was nationalized in 2018.

Alexander Paraschiy: This court ruling has a direct effect on Privatbank Eurobonds. So far, we do not see strong chances for the ruling to be affirmed by an appellate court. In any case, the likelihood is now higher of canceling the bail-in of the bonds, either by local or international courts.

Company: PrivatBank

Full company namePrivatBank PJSC
Country of riskUkraine
Country of registrationUkraine
IndustryBanks

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