Fertilizers did not go for the benefit of Sistema

AFC requires about $ 100 million from the Georgian businessman Roman Pipia.
05.02.2018
Kommersant
Origin source
AFK Sistema's subsidiary bank sues the Luxembourgian Loyal Capital Group of Georgian businessman Roman Pipia for $ 93.6 million of the loan. His own structures require $ 388 million in losses from Sistema for actions allegedly because of which they lost control over Rustavi Nitrogen. The Luxembourg District Court upheld the Sistema by rejecting the lawsuit of Loyal Capital.

At the disposal of Kommersant was the decision of the Luxembourg District Court, which considered counter claims of the structures of AFK Sistema and Mr. Pipia. East West United Bank (EWUB, AFC's subsidiary bank) requires $ 93.6 million loan debt and interest from Loyal Capital on August 12, 2016, while Loyal Capital and Cyprus Mathade Ltd (also owned by Roman Pipia, owns 10% of Rustavi nitrogen ) are asking about $ 388 million in losses from EWUB, Sistema Holding and AFK Sistema.

EWUB's requirements relate to a loan issued in 2014 in favor of Loyal Capital. The loan was granted for the purchase of a 45% stake in Agrochim SA (now 100% owned by the structures of Roman Pipia, owns 90% of Rustavi nitrogen), 90% of Agrochim became pledge, the maturity date was August 12, 2016. The borrower was unable to repay the loan because of falling prices for ammonium nitrate, the court wrote, and Loyal Capital "began to seek solutions to restructure" the debt to EWUB, and also to the Bank of Georgia, which in 2011 issued Agrochim and Rustavi nitrogen $ 100 million on the security of the property of the plant. In the summer of 2016, Roman Pipia's companies negotiated a loan with the EBRD, but without success.

EWUB demanded a refund, and in October 2016 filed a lawsuit. Loyal Capital has declared counter claims for recovery of losses in the amount of the value of "Rustavi nitrogen". In court, Loyal Capital claimed that in the failure of negotiations with the EBRD, including EWUB and AFC, who wrongfully demanded a loan repayment, are to blame. And EWUB allegedly violated bank secrecy, informing the Bank of Georgia of plans to foreclose on the collateral for the loan. As a result, according to Loyal Capital, the bank accelerated the sale of the plant's property from the auction.

The Luxembourg court indicated that information on the loan and pledge of EWUB was disclosed to the Bank of Georgia by Loyal Capital itself and was not a secret, the default on the loan was caused by the drop in prices for nitrate, and not by the actions of AFK and its bank. In addition, the court noted, in March 2016 Loyal Capital paid $ 24 million dividends. As a result, the EWUB court demanded that it be lawful, and the lawsuit Loyal Capital and Mathade Ltd - no (the decision will be appealed). In AFK Sistema, Kommersant confirmed the existence of a dispute. The hearing in the appeal has not yet begun, until February 26, the AFC must submit its response.

The partner, Alexander Bolomatov, doubts that Loyal's arguments have a great chance of success in the appeal: "It's unclear how the bank could interfere with the talks on on-lending of the debtor, and why?" But even in case of success in appeal, the prospects for a real return of the AFC money are unclear. Assets of Rustavi nitrogen were sold to EU Investments by Efrem Urumashvili on September 1, 2016 (in 2007-2010, he was deputy financial director of the Bank of Georgia), that is, shares that are pledged to EWUB are virtually not secured. The source of Kommersant, close to the AFK, does not rule out "challenging the withdrawal of the assets of the plant," noting that "Roman Pipia has the resources to repay the loan."

Alexander Bolomatov notes the atypical situation, when the bank took as security only shares, but not property. In his opinion, if the appeal is supported by EWUB, the bank can receive shares, and then challenge the auction for the sale of assets. In addition, the lawyer notes, you can try to bring the owners of the plant to subsidiary liability, given that they were paid dividends.

Roman Pipia, Bank of Georgia and EU Investments declined to comment. Sources "Kommersant" explain the reluctance to say a receipt on the non-disclosure of information on the criminal case of "unlawful seizure" of the property of the plant, which has dragged on for about a year. So, in March 2017, the Tbilisi City Court allowed the prosecutor's office to withdraw from Rustavi nitrogen the documents on loans and property pledges, as well as a lease agreement with EU Investments. Natia Sukhitashvili, the head of the Public Relations Department of the Prosecutor General's Office of Georgia, explained to Kommersant that the criminal case on the grounds of the crime provided for by Part 2 of Art. 180 of the Criminal Code of Georgia (seizure of another's property or property right by fraudulent collusion by a group of persons), instituted in fact, it does not yet have suspects. Now, according to her, "intensive investigative measures are continuing".

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