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. Last Updated: 07/27/2016

Rosbank Shareholders OK Unexim Merger




Rosbank's shareholders voted Tuesday to merge with Uneximbank, which is awaiting a court decision on the possible dismissal of bankruptcy proceedings.


"At closing, Uneximbank creditors will receive the restructuring instruments (cash, Eurobonds and notes). If closing takes place on June 30, the creditors will be paid as of such date," said Todd Schafer, partner in international law firm Hogan &Hartson.


Technically, the decision to dismiss bankruptcy proceedings can be made after the debtor repays or satisfies claims of all creditors in excess of the equivalent of 1,000 minimum wages (about $2,900).


The court is scheduled to meet July 3 to decide the fate of once-mighty Uneximbank, which crumbled in the 1998 financial crisis and handed its banking franchise to bridge bank Rosbank in a scheme used by local bankers to hide assets from creditors after the crash.


Uneximbank has debts of more than $2 billion, some $800 million of which is owed to foreign creditors.


Rosbank's shareholders said a joint shareholder meeting would take place after Uneximbank restructures its debts and after bankruptcy proceedings against Uneximbank are stopped.


Holders of Uneximbank's Eurobonds voted in May to restructure its debts, opening the way to a deal with other groups of creditors.


Once the restructuring agreement is signed, the bank's creditors will be entitled to a cash payment of $105 million.


Uneximbank will also issue 12-year Eurobonds worth $130 million guaranteed by Rosbank and notes that give a partial claim on Uneximbank's recovered assets.


However, while Uneximbank's creditors are awaiting the court decision, one of major Rosbank clients canceled its accounts with Rosbank, citing its failure to cut a deal with the creditors, lack of transparency from a managerial point of view and high cost of services.


Novolipetsk Steel Mill on Tuesday circulated a statement saying it was withdrawing its money from Rosbank.


With turnover of $1.5 billion a year, Novolipetsk was a major Rosbank client.


The company said transactions worth some $90 million were outstanding and that upon their completion it will transfer all accounts to ABN-Amro Bank, Deutsche Bank, Bank Austria Creditanstalt and Lipetskombank.