15:35 24.03.2017

Freight wagon fleet belonging to EBRD could be sold

3 min read
Freight wagon fleet belonging to EBRD could be sold

The European Bank for Reconstruction and Development (EBRD) that took away a fleet of 2,400 freight wagons under the collateral agreement in court from Interleaseinvest could sell it later, Director of the EBRD Corporate Recovery Department Kamen Zahariev has said.

He said wagons on the bank's balance sheet are for some period of time. The bank is not the natural operator of the wagons. Usually assets used as collateral are transferred to someone's management or in some period of time the assets are sold, he said. The bank would stick to the same strategy in this situation, Zahariev said.

He said that strategic decisions that would positively influence the private wagon operators market could be made.

The EBRD would look for a better decision for Ukraine, he said. There is a large interest to these wagons. The bank receives many proposals from operators and investors in the sector. It is too early to speak about the decision, but anyway this will be a transparent process that the bank would present, he said.

Commenting on the story how the bank had received these wagons, the EBRD representative said that it showed in what 'climate' non-performing loans (NPL) are returned in Ukraine. This is not only EBRD's loans. One should not forget about billions of U.S. dollars of NPL on the balance sheet of the Deposit Guarantee Fund and the on balance sheets of many Ukrainian commercial banks. They would have to return them somehow, Zahariev said.

He said that this story also shows that the company with liquid collateral assets and large revenue becomes a target for illegal seizers. There is a blur line between business and politics, he said. The loan issued to a private company at first turned out to be a loan issued to the minister, and the fall of the minister resulted in the collapse of his company, he said.

Zahariev said that the story with the return of collateral showed the weakness of the judicial system in Ukraine. The bank managed to protect its rights. It has ownership documents to the wagons, but it took much time to do this, he said. There were over 60 ineffective hearings in courts of Kyiv and Dnipro. There were cases when on the same day in one court two judges made absolutely opposite decisions. There were attempts to press on people, he said.

EBRD Country Director in Ukraine Sevki Acuner said that this was an interesting case that shows that investment climate in Ukraine is improving, as it is important for other financial institutions and investors to have confidence that if something goes wrong, their rights under the contracts will be observed and protected.

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