Odesa (Ukraine) – Dubai (UAE) Argentem Creek Partners (ACP), a U. S. hedge fund, announced on January 16, 2023, that the High Court of Justice of England ordered the garnishment of assets to the tune of $118 million held by Serhii Hroza and Volodymyr Naumenko, co-owners of GNT Group and Olimpex Coupe grain terminal in Odesa. Before that, Argentem Creek Partners initiated a replacement of executives in companies shipping grain for export via Odesa Commercial Sea Port.

GNT Group states that the action taken by Argentem Creek Partners to block operations of the Ukrainian grain terminal can disrupt grain shipments under the grain corridor, which is critically important for Ukraine and the whole world. Currently, the terminal’s operations are under control by the company, with all contracts being performed.

At the same time, the company is challenging currently available ACP-initiated unlawful decisions by registrars and Ukrainian and foreign courts before courts of law to prevent the grain terminal’s operations from being blocked.

GNT Group denies all allegations hurled at it and is prepared to meet its obligations to creditors in any civilized manner. This conflict has been provoked artificially by Argentem Creek Partners and Innovatus Capital Partners to ensure a rapid takeover of the stevedoring business in Ukraine because of the operation of the grain corridor. The steps they made were unnecessary to solving the issue of debt repayment.

GNT Group believes that by doing so, the creditors are trying to devalue the business for the subsequent non-transparent resale of the company’s assets to an interested third party.

GNT Group’s stance and conclusions are supported by the following arguments.

1. In 2019, G. N. Terminal Enterprises LTD (Dubai, UAE) managing company, a member of GNT Group, took out two loans – $75 million from ACP and $20 million from Innovatus. However, GNT Groups faced challenges with repaying the loan principal due to the aftermath of the Covid-19 pandemic of 2020-21 and an all-out war against russia in 2022.

 

The company negotiated restructuring and time extension for repayments with the creditors in writing till December 2022. With the grain corridor in operation, GNT Group had guaranteed prospects of repaying the debt both at the expense of its ongoing commercial operations and by refinancing the debt and raising business development investments from large international funds. The creditors were informed accordingly. They were also offered an option of selling a part of the company transparently to repay the debt.

The Group’s business has been audited by international audit firms regularly. However, in the summer of 2022, the Board of Directors consisting of ACP’s appointees only invited Ziff-Ivin Associates Ltd – a company that has already analyzed GNT Group’s commercial operations – to conduct the audit.

Because of that, GNT Group did not expect Argentem Creek Partners to take hostile steps to enforce the debt collection, for instance, by suing and blocking operations of the Ukrainian companies, such as Olimpex Coupe International LLC, Metalsukraine Corp Ltd LLC, and Inzernoexport Grain Transhipment Facility LLC. The companies listed above are managed by G.N. Terminal Enterprises LTD; they directly own and operate grain transshipment terminals in the seaport.

2. The creditors’ actions are indicative of an attempted hostile takeover (raiding) of GNT Group’s stevedoring business. The terminals operate in Odesa, but representatives of the creditor (Madison Pacific Trust Limited) changed the legal domiciles of the companies from Odesa to Lviv. They appointed lawyers from Hillmont Partners law firm, who have no work experience in the logistical services market, as Directors of these companies. The Directors were appointed contrary to the Corporate Agreement, under which a creditor’s representative is only permitted to appoint Commercial Directors with signing powers without replacing companies’ Directors.

With its 1500-strong employee team, the Group has always discharged its debt obligations meticulously over 25 years of doing business. In addition, GNT Group has demonstrated its transparency and trust of high-profile lenders in practice many times, having received $59 million of business development financing from the European Bank for Reconstruction and Development (EBRD).

Over six months of the operation of the so-called “grain agreement,” also known as the Initiative on the Safe Transportation of Grain and Foodstuffs from Ukrainian Ports, GNT Group shipped about 1.5 million tonnes of agricultural products via its terminals or 8.5% of the total of 17.5 million tonnes.

These high commercial performance indicators may have provoked Argentem Creek Partners to take a hostile action. However, it will give rise to further problems for agrarian exports during the war against russia, when it is critically important to ensure food security and cause Ukraine’s commitments to the UN and international partners to be met. In their statement, Argentem Creek Partners even admit that the conflict they initiated can give rise to “grain corridor disruptions.”

GNT Group’s employee team has already sent a letter to Volodymyr Zelenskyy, the President of Ukraine, to inform him about the threats to the operation of the grain corridor, the potential loss of jobs and reputational risks for Ukraine.

GNT Group started developing its business in 1993 by establishing Olimpex Coupe International, a company that started its operations based on PPK-7 of the Odesa Commercial Seaport State-owned Enterprise. Currently, GNT Group’s core business includes the transshipment of grain crops and oilseeds with ancillary services (freight forwarding, ship agency services) based on the modern grain terminal owned by the company at the back of berths 3 and 4 of Odesa Commercial Seaport and the Dry Port site that accommodates a grain and oilseeds treatment facility. Olimpex Coupe International’s grain terminal ranks among Ukraine’s Top 10 grain terminals. Investments in its development exceeded $80 million.