Public Stock Co. Orient Express Bank shareholder Finvision promised to provide 2.2 billion rubles in financial support for the Russian lender by purchasing some of its assets, RBC reported Aug. 27.
The pledged financial support helped the lender avoid the write-off of its subordinated bonds, which was planned for Aug. 23, the news report noted. Orient Express issued its 7 billion ruble subordinated notes in 2013 and converted them into perpetual bonds in 2017. The notes are held by some 300 VIP clients of the bank, according to the newswire.
Orient Express suggested in July that it could suspend the payment of interest on the subordinated debt or convert it into equity after the Russian central bank warned the lender's common equity adequacy ratio dropped below the required level between May 31 and June 5.
The lender told RBC that as of August its capital ratios complied with regulatory requirements and that it took a number of steps to restore its capital, while also benefiting from the promised 2.2 billion ruble support from Finvision, a company owned by Russian businessman Artem Avetisyan, who currently controls the bank with its business partners.
A representative of Baring Vostok Capital Partners Ltd., which lost control of Orient Express in June as a result of an ongoing legal dispute with Finvision, told the newswire the fund was not familiar with Finvision's proposal to buy some of the bank's assets, but welcomed any decisions aimed at restoring the lender's capital adequacy, as long as they do not remain on paper. Baring Vostok planned to boost the lender's capital via a 5 billion ruble share issuance when it was still its majority shareholder, but Finvision blocked the capital hike in court.
As of Aug. 27, US$1 was equivalent to 66.55 Russian rubles.
