A new obstacle arose in the dispute over the bonds of PJSC FGC-Rosseti
[ad_1]
A new obstacle arose in the dispute over the bonds of PJSC FGC-Rosseti, the early redemption of which, due to the reorganization of the issuer, was demanded by SIAB Bank. Cassation overturned the decision in favor of the bank due to procedural violations, sending it for a new consideration. Investors who filed similar lawsuits fear negative changes in law enforcement practice.
In the reasoning part of the cassation (published on June 7) on the claim of the St. Petersburg Industrial Bank (SIAB) against FGC-Rosseti (hereinafter referred to as Rosseti) on the early redemption of the company’s bonds, the Arbitration Court of the Moscow District (district cassation) drew attention to “gross violations of procedural norms”, admitted in the appeal. Thus, the operative part initially did not indicate the amount recovered in favor of the bank (40.1 million rubles), which had already been made in the process of correcting typos and misprints. However, this changes the essence of the judicial act “which is unacceptable,” the cassation noted. In addition, the appeal did not evaluate a number of the defendant’s arguments, including the possibility of applying the provisions of 292-FZ in the dispute (suspension of the operation of certain provisions of a number of laws and the establishment of specifics for the regulation of corporate relations in 2022-2023), which “is to be done”.
The outcome of the case is important not only for SIAB. In September 2022, FGC UES held a meeting of shareholders, at which a decision was made to reorganize it with the addition of a number of legal entities. The new company was named PJSC FGC-Rosseti, and on October 21 published dozens of messages about the emergence of bondholders’ right to demand early repayment from the issuer “in court.” At the end of December, she announced the termination of such a right.
But before this date, several investors managed to file claims: SIAB, as well as the management companies Ronin Trust, Transneft Invest, TFG, Alfa Capital, First, Ingosstrakh Investments, in total for more than 8 billion rubles The first three lawsuits have already been considered by courts of various instances, FGC-Rosseti challenged the decisions. Alfa Capital and TFG withdrew the claims at the end of 2022. In addition, the Association of Bondholders (ABO) clarifies that the Kuntsevsky District Court issued a number of decisions in favor of private investors for 10 million rubles. However, they have not yet entered into force, and the association has no doubt that the issuer will appeal against the decisions.
The SIAB claim in the first instance was rejected by the Moscow Arbitration Court, referring to Law 292-FZ adopted in July 2022, according to Part 1 of Article 7 of which the holder does not have the right to demand early repayment if, at the time of applying to the court, “the maturity date for the defendant to pay the face value of the bonds did not come.” The decision stated that the reorganization did not affect the company’s ability to service debt, it did not allow defaults and was 75% owned by the state. However, the appeal supported the bank. Its ruling states that the fact of reorganization of the debtor is sufficient for the right to early repayment.
Experts consider the position of investors to be “more reasonable”. Stonebridge Legal Arbitration Associate Boris Glushenkov notes that “if the documents are filed on time and the conditions are met”, early repayment claims are “usually granted”. The issuer can protect itself from early payments only if it provides creditors with security, such as a bank guarantee, he clarifies. The Civil Code expressly provides that “if the debtor has decided to reorganize, all creditors have the right to demand early repayment,” Stanislav Dobshevich, adviser at Better Chance law firm, confirms.
PJSC Rosseti believes that the reorganization “did not entail a violation of the rights and legitimate interests of bondholders”, therefore they have “no grounds” for early redemption. Investors expect lengthy proceedings. Aleksey Ponomarev, a member of the AVO Council, admits: “The issuer originally promised that investors might have a chance to receive money only if they win in the Supreme Court, and even that is not a fact.” Other plaintiffs declined to comment.
Andrey Mayorov, director of the asset management department at Ingosstrakh-Investments Management Company, fears that the outcome of the case in favor of FGC-Rosseti “may adversely affect investor confidence in the securities of the largest borrowers on the Russian market, which is already going through hard times.” The cassation ruling may hint at “the need for a broad interpretation of the Civil Code,” adds Ingvarr partner Igor Kokin, which will deprive bondholders of the unconditional right to demand early redemption upon the issuer’s reorganization.
[ad_2]
Source link
