Explanations as to Pivdenny Bank’s participation in funding Olimpex Coupe International grain terminal

Pivdenny Bank kindly calls your attention to the fact that RBK-Ukraine’s article titled “A 100-Fold Markdown. Olimpex Coupe’s Lien Release” contains distorted and incomplete information regarding the Bank’s participation in Olimpex Coupe International (GNT Group) grain terminal funding project.

In particular, it includes false allegations that the Bank allegedly accepted property as collateral without properly verifying its status (the article reads as follows: “the terminal’s property could not be mortgaged and/or pledged to third parties as such deal was expressly prohibited by the existing loan agreement entered into by and between, in particular, Argentem Creek Partners and GNT).

Pivdenny Bank had funded Olimpex Coupe International long before the company even got loans from the American funds named in the article.

Moreover, Olimpex Coupe International contacted Pivdenny Bank and requested the Bank’s approval to attract financing from the said funds (additionally to Pivdenny loans), which was further properly granted. 

In 2020, after Olimpex Coupe International tried to attract additional funds using the phase IV of the grain terminal as collateral, the Bank performed all the necessary checks of the collateral and found out that the specified object was included in the mortgage agreement with American funds. The borrower was notified of this and the company group initiated the procedure for release of the phase IV from the existing encumbrance.

The mortgage agreement entered by and between Olimpex Coupe International and American funds ceased to apply to the phase IV of the grain terminal. It was only after the Bank received all the supporting documents and the relevant approval from the American funds, that Pivdenny Bank did enter into an agreement to provide additional funding secured by this property (the phase IV of the grain terminal).

Over the next two years, the parties continued to fulfil their obligations in good faith, during which time the Bank received no claims from American funds as to an allegedly improper collateral defective or any violations in providing additional funding to Olimpex Coupe International. It should be noted that at the beginning of the full-scale war in Ukraine, Pivdenny Bank agreed to accommodate the borrower despite significant risks and difficult circumstances in a situation where Olimpex Coupe International could not fulfil its obligations on time.

It was also untrue that the Bank allegedly sold mortgaged property at a substantially lower price and violated statutory collection procedures.

At the end of December 2022, the loan repayment period expired under the loan agreement and in January 2023, Pivdenny Bank sent a corresponding official letter of demand to Olimpex Coupe International. After the expiration of the 30-day period prescribed by law, the Bank initiated the foreclosure on the pledged property incl. real estate and movable property (equipment, special vehicles). On 13 February 2023, the Bank executed the first sales agreement of real estate, which was a portion of the pledged property.

As the sales agreement was to be issued on a special notarial form, the notary checked the existence of any prohibitions (including seizures) imposed on the real estate (property on sale) in accordance with the Ukrainian laws. Therefore, such sales agreement could not possibly have been executed, if the property was subject to a court-imposed attachment. The article’s assertion is untrue about the existence of any obstacles (property seizures) on the date of sales agreement.

The article states that the value of the grain terminal sold by the Bank is 4.3 million US dollars. It is worth noting that this is the market value of only a portion of the collateral, namely only a few real estate items belonging to the phase IV of the grain terminal. The Bank did not sell movable property in February 2023.

At the same time, it is downright manipulative to compare this value with the cost of the entire Olimpex Coupe International grain terminal as an integrated business, which, judging by the article, could cost anywhere from 177 to 350 million US dollars according to various estimates. The phase IV of the grain terminal provides for approximately 60 thousand tons of simultaneous grain storage out of the total 190 thousand tons of terminal capacity, and therefore cannot be identified with the cost of the entire complex or business as a whole.

The picture below shows the phase IV of the grain terminal in red, and the the phase I-III of the terminal in yellow.

Pivdennyi Bank only acted in strict compliance with the applicable laws of Ukraine and with adherence to all the necessary due diligence procedures and principles. In addition, the Bank is invested in transparent and reliable coverage of its participation in the Olimpex Coupe International funding project.