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Ex-owner eyes 25% stake in Privatbank as compensation for its nationalization

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Ex-owner eyes 25% stake in Privatbank as compensation for its nationalization

JSC CB PRIVATBANK's former majority shareholder Ihor Kolomoisky hopes he could reach an out-of-court agreement with Ukrainian authorities over the lender's 2016 nationalization with the help of Rothschild bank, Reuters reported.

One of the options that Kolomoisky could accept under such an agreement would be to get a 25% stake in the Ukrainian lender as compensation for capital he had invested in the bank, while the remaining part of Privatbank would continue to be owned by the Ukrainian state.

A source familiar with Kolomoisky's discussions with Rothschild told the newswire the International Monetary Fund, which has been financially supporting the country, was unlikely to accept any deal resulting in Kolomoisky getting a partial stake in Privatbank. The central bank said it would not be involved in any resumption of negotiations, which would be a matter for the Ukrainian ministry of finance and Kolomoisky, Reuters noted in its May 24 report.

Privatbank was nationalized after its shareholders failed to recapitalize it, but Kolomoisky has always rejected the central bank's assessment of the lender's financial position and questioned the nationalization. Rothschild had an official mandate in 2017 to broker an agreement between the businessman and Ukrainian authorities, but it failed, the newswire said.

In April, Kiev District Administrative Court declared the nationalization of Privatbank as unlawful, with the central bank officially appealing the ruling May 24. Privatbank also recently filed a lawsuit against Kolomoisky and another former shareholder in the Delaware Court of Chancery in the U.S., accusing them of laundering proceeds from corporate loans received from the lender.

Newly elected President Volodymyr Zelenskiy's banking sector adviser Viktoria Strakhova said earlier in May that returning Privatbank to its previous owners is not possible, but the best option in the current situation would be to reach a settlement with Kolomoisky and write off some of the loans issued to his companies.