ABH Holdings expects big losses from nationalization of its bank in Ukraine, preparing to defend its interests
MOSCOW. June 19 (Interfax) - The Luxembourg-based ABH Holdings S.A. (ABHH) will take legal action to protect its interests if Ukraine nationalizes the holding's Sense Bank, formerly Alfa-Bank Ukraine, Ukrainian media reported, citing an ABHH statement.
The holding will seek protection under the Belgium-Luxembourg-Ukraine investment protection agreement if the country refuses to compensate for lost investments voluntarily.
"The losses incurred by ABHH will be material in the event that Sense Bank is nationalized, so ABHH will take appropriate measures in terms of both national and international law and existing agreements to compensate for them," the holding says.
ABHH said the law on the procedure for the withdrawal from the market or nationalization of banks owned by persons sanctioned in Ukraine had already been signed by the Ukrainian president, so the holding is seriously concerned that the National Bank of Ukraine will carry out its intention to nationalize Sense Bank without compensation to ABHH "in excess of the nominal amount."
"The new law is aimed at withdrawing banks owned by sanctioned persons. However, the nationalization of Sense Bank will lead to losses for persons not under sanctions, including bondholders and non-sanctioned ABHH shareholders," the holding said.
Going by the shareholder structure, this is referring to The Mark Foundation for Cancer Research and Unicredit s.p.a., which own 3.8736% and 9.9%, respectively.
The main ABHH shareholders are Mikhail Fridman - 32.8632%, Pyotr Aven - 12.4018% and Andrei Kosogov - 40.9614%, all sanctioned in Ukraine. They do not have the right to dispose of or divest their assets until the sanctions are lifted.
ABHH has reached an agreement with an international investor to sell 75.6% of the bank's shares in Sense Bank for a symbolic $1, and considers keeping the bank privately owned to be the best option. ABHH said that in the fall of 2022, shareholders wrote to the National Bank of Ukraine, indicating their readiness to transfer the bank to state ownership without compensation and voluntarily, if such a decision were to be made by the regulators, but ABHH continued to look for an investor since no response to this letter was received.
Sense Bank was the 10th largest of the 65 banks operating in the country as of the beginning of May by assets, which were UAH 97.19 billion. Authorized capital is 28.726 billion and equity is UAH 7.49 billion.
The parliament at the end of May passed a law envisaging the nationalization of Sense Bank as a systemically important bank due to the presence of sanctioned persons among its shareholders. Ukrainian President Vladimir Zelensky recently signed the law.
The National Bank of Ukraine has so far not held open the possibility of agreeing on a deal to sell the bank.