Ukraine's nationalised PrivatBank hires consortium headed by Rothschild to restructure insider lending

Ukraine's nationalised PrivatBank hires consortium headed by Rothschild to restructure insider lending
By Sergei Kuznetsov May 10, 2017

The supervisory board of Ukraine's state-owned biggest lender PrivatBank has selected a consortium of companies consisting of Rothschild, EY and FinPoint with the aim to restructure and return loans issued to affiliated related parties by previous owners.

In December, the government announced the nationalisation of PrivatBank after it had failed to fulfill a three-year recapitalisation plan. The bank was found to have a UAH148bn (€5.1bn) hole in its balance sheet as of early December, which at the time was said to be almost entirely due to related party financing.

On April 10, the Governor of the National Bank of Ukraine (NBU), Valeriya Gontareva, told journalists that the post-nationalisation audit of the bank established that not 97% but 100% of the corporate portfolio was issued to related parties. Privatbank's owners have always denied any wrongdoing.

To cover the capital shortfall the Ukrainian government injected capital of UAH117bn (€4.1bn) and bailed-in PrivatBank's non-deposit unsecured creditors for the amount of UAH29.4bn ($1.1bn), including bondholders for the amount of $595mn.

The cooperation agreement between PrivatBank and the consortium of companies headed by Rothschild will be signed early May, the lender said in a statement published on May 6.

Earlier, Gontareva, accused the former owners of PrivatBank, oligarchs Ihor Kolomoisky and Hennady Boholyubov, of effecting more than UAH16bn (€561mn) in fraudulent transactions on the night before the bank was transferred to state hands.

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