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Liquidators in VTB Bank’s European division accused Angola of defaulting on loans after the lender’s Russian parents were hit with sanctions.
The former VTB Europe, Frankfurt-based OWH, has launched arbitration proceedings against the African country to pay off the loan, people said. It is trying to recover funds for assets held in a subsidiary and that have been cut off from the state-run VTB due to Russian Western sanctions.
The lawsuit has been years since Russia’s invasion of Ukraine, and has hopes for a peace agreement. Today, the complex fallout from sanctions on Russian banks remains plagued by countries that once borrowed from Moscow.
Angola has been fighting default legal claims on debt issues in December and January documents that all lenders were sanctioned, but did not identify any entities or loans involved. has been revealed.
The OWH has declined to comment after being called out by Moscow-based parents.
The Angola Treasury Ministry declined to comment on the identity of the entities taking the legal action mentioned in the bond documents. It added that it is “willing to disclose more details.” . . As soon as there is a solution, avoid speculation and let all stakeholders know how (it) will resolve at the right time.
The mystery surrounding the claims of default is baffled by investors as President Joao Lowrensaud’s debt government is trying to regain access to the global bond market. Double digit borrowing costs.
Angola issued about $2 billion in bonds in December and January, using the debt as security for a billion-dollar loan from JPMorgan. Authorities say they plan to sell more debts.
The exact size of the debt that OWH claims to owes is unknown.
VTB has lent billions of dollars to Angola since 2012 as part of a push by Russian banks to Africa, but many of the borrowings had been repaid by 2019.
However, Angola is also an exporter of Russian state arms and aerospace, borrowing $278 million from VTB’s former Austrian branch and Russian state-backed lenders vnesheConombank, Roseximbank and Gazprombank in 2011. I purchased a communications satellite provided by Rosoboronexport.
The satellite loan was due to be repaid last year. By then, all four original lenders had been targeted by us or by other sanctions.
Angola revealed in its bond issuance document until 2022 that it owes $200 million to VTB Bank Austria, which has become part of VTB Europe. This disclosure was not shown in the latest debt sales documents.
German regulators squealed VTB Europe’s activities in 2022, with thousands of German depositors following sanctions on Russian parents.
The subsidiary, renamed OWH, was removed from the US sanctions list last April and is currently under liquidation. OWH has a license under the UK sanctions regime, which allows you to receive payments.
“The existence of international sanctions, particularly related to Russian groups, has caused legal and practical difficulties in the performance of such commitments, as the Russian counterparties themselves acknowledged,” the Angola Treasury Ministry said. I stated.
“In fact, there is an arbitration process underway where the two parties have different understandings on the same issue.”
VTB Bank said it had “no claims against the Angola government” and that it would not be liable for the lawsuit by OWH administrators after the bank lost control of the unit on what is called “completely illegal reasons”.
VnesheConombank and GazProbank did not respond to requests for comment. Roseximbank declined to comment.
