PrivatBank (Kyiv) note holders have challenged the bail-in for their securities in exchange to the additionally issued shares of the bank in the London Court of International Arbitration, Managing Partner of Suprema Lex law firm Viktor Moroz acting as an advisor of the noteholders has said.

"On behalf of some noteholders today we have initiated a lawsuit regarding violation of their rights during the bail-in for PrivatBank's notes in the international arbitration institute. The proceedings are at the stage of approving the arbitration procedure and selecting arbiters," he said.

Moroz also said that the intent of PrivatBank to replace a trustee is linked to the fact that there is an agreement under which the trustee's power is limited in challenging any steps of PrivatBank regarding the notes, which actually paralyzed the possibility of protecting the noteholders. It is also linked to a conflict of interests between the German trustee and the National Bank of Ukraine (NBU).

Moroz said that the replacement of the trustee would allow a group of noteholders to more effectively protect them in court.

As reported, PrivatBank is calling a meeting of holders of loan participation notes worth $175 million due on February 28, 2018 and $200 million due on January 23, 2018 for June 5, UK SPV Credit Finance Plc (UK), the issuer of the securities, reported.

The agenda of the meeting includes the issue of withdrawing the powers of the trustee, namely Deutsche Trustee Company Limited, appointing Madison Pacific Trust Limited a new trustee, and other procedural matters.

Under the nationalization of PrivatBank its obligations to the specially created British company (SPV), the issuer of Eurobonds, were subject to a bail-in procedure and were exchanged for the additionally issued shares of the bank.

Then the Individuals' Deposit Guarantee Fund, which introduced temporary administration in the financial institution, sold all its shares to the state for UAH 1. The matter concerns three issues of eurobonds: those worth $175 million at a rate of 10.875% repayable on February 28, 2018, $200 million at a 10.25% repayable on January 23, 2018, of which $40 million was repaid in August 2016, and $220 million at a rate of 11% with maturity in 2021.