Leader Management Company applied to VimpelCom (operating under the Beeline brand) with a demand to recognize Veon’s obligations under Eurobonds, but received a “categorical refusal”. Oleg Alyoshin, deputy general director of Lider, told Vedomosti about this. As a result, the company was forced to go to court, he said. Thus, Leader is trying to ban the sale of VimpelCom through the courts without guarantees of payment.
CJSC “Leader” (management company) manages the funds of pension funds of NPF and PFR, as well as insurance companies. The company’s shareholders are VEB.RF, Gazprom, NPF Gazfond and Gazprombank, follows from the information on the company’s website. According to SPARK-Interfax, Gazprom has 25.71%.
On November 24, the Russian office of VimpelCom announced that a group of top managers of the operator’s company, headed by CEO Alexander Torbakhov, had entered into an agreement to buy the company from the Veon group of companies. As part of the deal, the Russian company was valued at about 370 billion rubles, Veon said in a release. But in accordance with the agreement, Veon will receive a reward of only 130 billion rubles, it was specified in an official statement.
Later, Vedomosti wrote that the sale of VimpelCom would be carried out with borrowed funds. The most likely creditors are Sberbank, to which the operator already owes 100 billion rubles, as well as VTB and Gazprombank.
Initially, Leader filed a lawsuit with the Moscow Arbitration Court on September 8, trying to recover funds in the amount of debt obligations of the Dutch Veon Holdings BV on bonds in the amount of about 1.8 billion rubles. Initially, the plaintiff did not ask for any interim measures, but on November 29, a few days after the announcement of Veon’s plans to sell VimpelCom, he filed a petition with the court.
In its lawsuit dated November 29, Leader demanded not only to seize the funds in the defendant’s bank accounts for the amount of claims, but also to prohibit Veon Holdings BV from taking any actions related to the transaction, without including in its perimeter a clause stating that the new owner assumes obligations to Russian holders of Veon Eurobonds in full or issues replacement bonds on equivalent terms.
The court considered the claim on November 30 and refused CJSC “Leader” to satisfy its claims. According to the judge, the applicant did not provide evidence that the failure to take interim measures would make it difficult to enforce the future court decision and could cause him significant damage, but this decision can be appealed. The next hearing on the lawsuit itself is due on January 16, 2023.
According to Alyoshin, the denial of provisional measures does not change the essence of the claim. At the moment, the company is analyzing the issue of appealing against the court refusal in interim measures and does not rule out a new appeal to the court with a similar petition, depending on the development of the situation.
“We expect VimpelCom to unconditionally recognize itself as liable for the entire volume of Veon’s Eurobond obligations to Russian investors,” Alyoshin told Vedomosti. According to him, the company does not put restrictions on the deal, but draws attention to “the need to settle its obligations to Russian holders before making decisions on its internal corporate problems.”
As the plaintiff’s representative emphasizes, “such an obviously dismissive attitude of the telecommunications holding towards Russian investors and citizens cannot positively affect its reputation and further borrowing opportunities.”
At the first court session on December 1, the Bank of Russia was involved in the process as a third party, and the case was adjourned until January 16, 2023 due to the fact that the Central Bank needed time to get acquainted with the essence of the dispute, Alyoshin said.
A VimpelCom representative declined to comment. Vedomosti sent a request to Veon.
This lawsuit is unlikely to be decisive for the sale of VimpelCom to the company’s top management, experts interviewed by Vedomosti believe.
The valuation of the asset is a multiple of the amount of the claim, says Alexander Zhuravlev, managing partner of the law firm EBR. Nevertheless, the buyer will not ignore it, but will include the risks of satisfying the claim in the price of the transaction or provide additional protection tools in the transaction documentation, for example, mirror payments from Veon in the amount of the amounts recovered under the claim. In similar transactions, this is what buyers usually do, the lawyer says.
“As for interim measures, in cases where the measures requested are not commensurate with the amount of the claim (as in the case of VimpelCom), the courts usually refuse to impose them,” Zhuravlev points out.
“I think this lawsuit will not interfere with the approval of the transaction by European regulators, but the Russian regulator may take into account the interests of local creditors and include requirements for payment guarantees in the terms of approval of the transaction. Veon may well meet creditors halfway in order to maintain a reputation as a reliable borrower even in such extraordinary conditions,” suggests Vyacheslav Bunkov, Corporate Ratings Director at Expert RA. In addition, the telecommunications holding Veon, which operates in different countries, has “a lot of experience in finding compromises with the authorities,” he added.