The United Kingdom has banned Sberbank from carrying out transactions with its former British subsidiary, Sberbank CIB. The agreement would allow both organizations to offset non-performing assets. The transaction was banned by the UK Treasury’s Office of Financial Sanctions Enforcement (OFSI).

The British Ministry of Finance refused to allow the former subsidiary of Sberbank to exchange assets with the parent structure

The assets in question are estimated at $107 million. From the Teneo Financial Advisory report, referred to by RBC, it appears that a subsidiary of Sberbank kept these funds in bank accounts in the Russian Federation.

The subsidiary’s obligation to the former parent structure amounts to $95 million, but due to sanctions it no longer has access to these funds.

During the negotiations between the parties, an agreement was created that proposed paying the obligations of the British “daughter” with funds in accounts in Russia. Therefore, the parent structure had to withdraw from creditors.

Such a proposal was submitted to the British Ministry of Finance last autumn. The response did not arrive until the end of August and was negative.

“Therefore, the parent’s unsecured claim against the company remains in effect, and money held by the parent on behalf of the company remains blocked and unavailable to unsecured creditors,” the report says.

Other options are currently being considered to resolve the situation with creditors. They involve provisional and final payments to unsanctioned creditors for unsecured loans. Whatever scenario the parties choose, they will need permission from the British courts and OFSI. As noted in the document, the company will most likely remain under external management until March next year.

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Author:

Natalia Gormaleva

Source: RB

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I am a professional journalist and content creator with extensive experience writing for news websites. I currently work as an author at Gadget Onus, where I specialize in covering hot news topics. My written pieces have been published on some of the biggest media outlets around the world, including The Guardian and BBC News.

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