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Avellum and Sayenko Kharenko Advise on Restructuring of Sovereign-Guaranteed Loans in Ukraine

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Avellum has acted as Ukrainian counsel to the Ministry of Finance of Ukraine on the restructuring of a sovereign-guaranteed loan provided by JSC Sberbank of Russia to the Yuzhnoye State Design Office and the Road Agency of Ukraine (with an outstanding principal balance of approximately USD 367 million), and another loan by Citibank and Sberbank to the Road Agency of Ukraine (with an outstanding principal balance of EUR 37.3 million). Sberbank and Citibank were advised by Sayenko Kharenko, with Linklaters advising on matters of English law.

According to Avellum, “pursuant to the restructuring terms, the outstanding principal balance of these sovereign-guaranteed loans and accrued interest thereon were discharged in full, and these loans were terminated, in exchange for the delivery to lenders in respective portions of (i) USD 315.769 million aggregate principal amount of Ukraine’s 7.75% Notes due 2019, representing 75% of the outstanding principal balance of loans (plus accrued interest), and (ii) USD 102.246 million aggregate notional amount of Ukraine’s GDP-linked Securities, representing the remaining 25% of the outstanding principal balance of the loans.” Avellum reports that, “the restructuring of these sovereign-guaranteed loans was conducted in full compliance with the financing targets established in Ukraine’s Extended Fund Facility with the IMF agreed in March 2015.”

The Avellum team was led by Partner Glib Bondar, supported by Lead Associates Artem Shyrkozhukhov and Taras Dmukhovskyy, along with lawyers Taras Stadniichuk, Anastasiya Voronova, Pavlo Shevchenko, and Orest Franchuk.

The Sayenko Kharenko team advising the lenders was led by Partner Nazar Chernyavsky and included Counsel Anton Korobeynikov and Associate Taras Shyb.

Linklaters did not reply to our inquiry on the matter.

Editor’s note: After this article was published Linklaters contacted us to report that its team was led by Partners Mirthe van Kesteren and Dmitry Dobatkin, and consisted of London and Moscow-based lawyers Simon Few, Adrian Newell, Vladimir Gogokhia, and Ryan Ayrton.