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Under the Second Stage of Dutch Auction the First Successful Sale of Assets Pledged to the NBU Takes Place

14 December 2018

Press Release

 

On 12 December, the Deposit Guarantee Fund (DGF) at the approval of the NBU held a successful Dutch auction to sell the pool of loan claims of the insolvent banks pledged to the NBU for the amount of more than UAH 6.8 billion.

 

The sale of assets was announced by the First Financial Network (FFN), an asset sale adviser. Six investors took part in the bidding, which is the highest number of bidders in the history of auctions for the sale of insolvent bank assets.

 

“The investors’ interest in the auction shows that the asset sale advisers did a great job marketing among the potential investors,” mentioned Igor Budnyk, Director of the NBU Risk Management Department.

 

Starting at UAH 235 million, the pool sold at UAH 130 million. It consisted of 35 loans to Delta Bank JSC, Eurogazbank JSC and Active Bank PJSC. According to the DGF, the most attractive assets in the pool are solar energy equipment in Mykolaiv Oblast, land plots in Kyiv Oblast, agricultural equipment, in particular seed production equipment in Rivne Oblast.

 

“We attracted attention of the large foreign and domestic investors to the Ukrainian market of non-performing loans.  It is a signal to investors that the non-performing loan market in Ukraine is interesting and open, operating under the clear and generally accepted rules. It is our first successful auction organized through the international asset sale advisers.  We certainly hope that the competition for our lots will keep growing, as well as the price that real buyers are prepared to pay,” said Taras Yeleiko, Director of the DGF Department for Consolidated Sale of Assets.

 

The auction was held as the second stage of Dutch auctions to sell the pool of loan claims of the insolvent banks pledged to the NBU. The book value of the claims is UAH 11.5 billion and they were previously put for sale by asset sale advisers First Financial Network (FFN) and The Debt Exchange (DebtX) within the framework of a pilot project of asset package sale.

 

At the first stage, the DGF sold these assets in separate lots in ProZorro.Sale system through a Dutch auction, receiving as a result over UAH 80 million for the loans worth UAH 352.9 million at book value. At the second stage, loans were grouped into pools to be sold by DebtX Ukraine LLC (a subsidiary of DebtX) and First Financial Network Ukraine LLC (a subsidiary of FFN) at a Dutch auction under the joint pilot project run by the NBU and the DGF since early 2017.

 

Two pools were put for sale under the said pilot project in September 2017 – these were the loan claims of the insolvent banks  pledged to the NBU. Two companies were engaged in the sale – DebtX Ukraine LLC and First Financial Network Ukraine LLC. The DGF set the initial prices at UAH 600 million and UAH 810 million respectively.  However, the auction failed as no bidders registered for the auction for one of the pools and price bids were much below the initial price for the second one. In view of the above, the Executive Directorate of the DGF decided to sell these loans in separate lots at a Dutch auction. Having received the decision of the DGF Executive Directorate, the NBU, as the pledgee, approved the conditions to sell the assets which it held as a pledge.

 

Over eleven months of 2018, the NBU has received UAH 2.5 billion of repayments on refinancing loans of insolvent banks, which makes almost double amount received in the same period last year. Of this amount, UAH 618.3 million came from selling assets at Dutch auctions.

 

 


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Last modification   14.12.2018