The High Court of Ireland decided to liquidate two “daughters” of STLC

Ireland’s High Court decides to liquidate two subsidiaries STLC in Ireland, GTLK Europe DAC and GTLK Europe Capital DAC, after lenders reported that the companies were unable to “return a net deficit of almost $1.6 billion”, writes Reuters.

It is clarified that the main business of the companies is the leasing of aircraft. In 2022, the companies of the STLC group fell under the sanctions of the UK, the US and the EU, which led to the inability to make payments on Eurobonds.

The High Court of Ireland was supposed to consider the application for liquidation of the companies on May 29, however, on May 26, the “daughters” applied for the appointment of an expert after the decision of the Russian government to write off debts in the amount of $ 1.5 billion, wrote Bloomberg. The examination procedure is intended for companies that have the potential to survive and recover.

As a result, the High Court decided to reject the request for an expert examination. According to Judge Conor Digman, “the applicant acted in bad faith”. Among the shortcomings on which companies could be denied this procedure, he cited the lack of “reasonable chances of survival for firms as a going concern”, since “the possible emergence of certain assets in the future” cannot be equated with the potential viability of companies.

According to Reuters, bondholders in aggregate must pay about $3.75 billion. In connection with the decision of the High Court to liquidate GTLK Europe DAC and GTLK Europe Capital DAC, Moscow suspended trading in bonds maturing in 2024-2028 Vedomosti sent a request to the STLC.

Both companies are issuers of STLC Eurobonds, recalled Alexei Bulgakov, head of debt market analytics at Renaissance Capital. According to him, the Russian PJSC STLC is the guarantor for all issues of STLC Eurobonds. On May 31, the company reported that STLC had already requested from the National Settlement Depository (NSD) the lists of holders of Eurobonds of the GTLK-24 issue as of May 30, when the coupon payment cut-off date was.

Bulgakov also recalled that Petropavlovsk Plc, the issuer of Petropavlovsk Eurobonds, had already gone through the liquidation procedure, but it was not subject to Western blocking sanctions. July 12, 2022 UK-registered Petropavlovsk informedthat applied to the High Court of London for the appointment of external administration due to the fact that the company is insolvent under UK insolvency law. In addition, the company has also applied to withdraw its ordinary shares and bonds maturing in 2024 from trading on the London Stock Exchange (LSE).