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VTB Head Andrey Kostin admitted that AGD Diamonds may be resold

09 november 2020
Image credit: AGD Diamonds

(INTERFAX.RU) - At least two serious buyers are interested in diamond miner AGD Diamonds, said Andrey Kostin, Head of VTB at a press conference during the investment forum "Russia calling!" held by VTB Capital.
“Our position is very simple, we are absolutely bona fide creditors. We have a certain amount, and they are ready to return it to us, but they tell us that there will be some kind of conversion, in rubles into dollars, at some old exchange rate. We have considered this and found that almost $ 100 million is missing from what they owe to us. And we do not think that we should bear these losses. Therefore, provided that this amount will be returned to us or we will have some kind of agreement, then for God's sake, we will definitely not make a claim for this asset,” he said.
“If somehow this will not happen (a settlement of the dispute between LUKOIL and Otkritie, as well as full compensation for all costs of VTB - IF), then we will take this asset. But we will look for a buyer for it. We will sell it simply on certain conditions. We have at least two such interested parties. A person who is quite experienced in this area, a well-known businessman is ready to join this process and take this asset,” added Kostin.
The asset, which was developed by LUKOIL, was sold to Otkritie Industrial Investments LLC (OII, an offshoot of Otkritie Holding, which filed for its own bankruptcy in February this year) for $ 1.45 billion in 2017.
At the end of May, Russia’s Federal Antimonopoly Service (FAS) filed a lawsuit to revise the transaction for the purchase of AGD. As FAS found out, while purchasing the asset Otkritie Holding concealed the data regarding the citizenship of its three shareholders from FAS. In addition, according to FAS, the transaction was double overpriced. Considering that the main asset of the holding at that time was Otkrytie Bank, which fell under reorganization a few months after the transaction, the contested transaction may cover up a withdrawal of the bank's funds in favor of the holding’s beneficiaries with foreign citizenship, FAS said.
The transaction for the purchase of AGD shares by Otkritie Holding was partially financed by VTB, which issued a loan to OII for $ 873 million and received the company's shares as collateral. Initially, the bank announced that OII had ceased to fulfill its obligations under the loan. This fact, as well as the attempt by FAS to reverse the deal, forced VTB to file a lawsuit against the OII demanding the return of the loan funds.
At the same time, the head of FAS, Igor Artemyev admitted the possibility of a pre-trial settlement of this dispute, but on the terms proposed by FAS and the Central Bank, which now owns Otkrytie Bank.
Kostin said at a briefing on Friday, "I have never seen this settlement agreement in my life."
“FAS is writing it somewhere and says that these are the terms that must be accepted. I don't know about any agreement at all. But I had contacts with Zadornov (Mikhail Zadornov, head of Otkritie Bank - IF) and Alekperov (Vagit Alekperov, President of LUKOIL - IF) regarding this mater," he said.