Russian “bad assets” bank Trust threatens to bankrupt Russian Standard

By bne IntelliNews July 16, 2023

The state-controlled “bad assets” bank Trust (Trast) could file a bankruptcy suit against the Russian Standard holding of Rustam Tariko, a representative of the bank told RBC business portal. Russian Standard (Russky Standard) reportedly violated the terms of restructuring for $85.7mn and over the past year "systematically allowed delays on the loan", Trust bank claims.

Russian Standard in turn argues that it has repaid almost a third of the original debt, in addition to the liabilities of other group companies whose debts have been paid in full.

As reported by bne IntelliNews, Rustam Tariko has been dragging out the matter with several failed debt restructuring deals after it defaulted on the $545mn worth of bonds in November 2017. In April 2020 one of the largest bondholders of the default issue of Russian Standard Pala Assets (holds 25% of the bond issue) started proceedings for claiming a collateralised 49% of the bank's equity.

Russian Standard Holding consolidates Tariko's financial and liquor assets: Russian Standard Bank with its insurance company, as well as Roust Group, which produces and distributes vodka and sparkling wines. Roust produces vodka under the Russian Standard, Zelenaya Marka, Parlament, Zhuravli and other brands, as well as wines, whisky, vermouth, gin, cognac and liqueurs.

Trust (Trast) Bank is a “bad” assets bank set up by the CBR after it was bailed out in the 2019 banking sector clean-up. Trust has picked up Russian Standard liabilities from formerly bailed Binbank. 

In May 2020, Russian Standard's liabilities to Trust were estimated at $85.7mn. Then the parties agreed to restructure the debt: under the terms of the deal, Russian Standard repaid $15.3mn ahead of schedule, and the rest of the amount was due to be repaid in equal instalments according to the schedule until the end of 2023. 

As of September 2022, the remaining debt to Trust was estimated at approximately $50mn.

Lawyers interviewed by RBC remind that in order to start bankruptcy proceedings, the creditor must publish a notice of its intention to do so in the Unified Federal Register of Bankruptcy Information. This must be done no later than 15 days before filing a lawsuit. As of 13 July, there were no such statements from the Trust bank regarding Russian Standard filed in the register.

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