The largest premium gas station operator may acquire a "Trojan" lender.
Recently, the Deposit Guarantee Fund for Individuals put up for sale its largest lot in history—a billion-dollar account receivable from Forum Bank. If the auction, scheduled for August 23 on the Setam electronic trading platform, is uncontested and the winner buys the lot at a price close to the starting price (850 million hryvnias), the discount will exceed 200 million hryvnias.
But that's not all the good news. By purchasing this lot, its new owner will automatically become a creditor of one of the most prominent players in the petroleum products retail market—WOG (Western Oil Group), part of the Continuum business group. This conclusion is based on the fact that the lot offered for sale by the Guarantee Fund is secured by 32 gas stations (out of 512 owned by WOG), as well as a 17-story administrative building on the Moscow ring road (11 square meters at 3 Akademika Zabolotnogo Street).
According to DS, this property was pledged to Forum Bank under several loan agreements executed by Continuum entities between March and June 2013. The primary borrowers under these agreements were the Lutsk-based companies Golden Equator and the private enterprise VK Impex, which borrowed a total of $80 million from the bankers. Galicia Plant LLC and Ternopilnaftoprodukt PJSC, which pledged the aforementioned gas stations, agreed to act as guarantors. Ukrainian-English Joint Venture Western Oil Group LLC also provided a voluntary mortgage on the aforementioned administrative building.
Both companies pledged to repay the borrowed money by December 31, 2019, but Forum stopped believing their promises much earlier.
As early as 2014, borrowers fell behind on interest payments, citing the deterioration of their financial situation caused by the sharp devaluation of the national currency. Despite this problem, a mutual understanding was quickly reached between the parties: to quell the situation, Forum signed several more surety agreements, the primary party to which was West Oil Group LLC, which pledged another dozen gas stations as collateral. But last year, one after another, the guarantors began filing lawsuits in the courts, petitioning for the "termination of the mortgage agreements."
What prompted Continuum's decision to escalate tensions? According to one theory, it was triggered by the transfer of control of Forum from Orthodox oligarch Vadim Novinsky to the state in 2014, when a temporary administration was appointed at the bank, followed by a decision to liquidate it. This was especially true given that shortly thereafter, WOG's founders reportedly lost several important sources of income. For example, the opportunity to purchase gas condensate at favorable prices from the state-owned Ukrgazvydobuvannya following the dismissal of Serhiy Kostyuk, a manager close to the Continuum founders, from his position as its head in the summer of 2015. A separate blow to the group was the untimely death of WOG's key founder, Igor Yeremeyev, in an accident last summer.
This tragedy hit Continuum's oil products wing the hardest, as Yeremeyev was responsible for its development, while his business partners were responsible for other areas: Sergey Lagur - for the banking business, Stepan Ivahiv — for the agricultural sector, while Petro Dyminsky is preoccupied with his football club, Karpaty. Perhaps this is why Continuum's attempt to sever official ties with Forum ended in failure: the bank's lawyers secured the recognition of all pledge agreements as valid. It is on this basis that the Deposit Guarantee Fund has now put the group's debts up for sale, thereby giving WOG's numerous competitors (for example, the Privat Group) the opportunity to gain creditor status, which could be converted into its assets at a convenient opportunity.
However, the latter's representatives have already stated that they intend to do everything possible to prevent this scenario. "WOG will take all necessary and sufficient measures and actions to ensure the safety of assets and prevent unfair actions and attacks by third parties," the company stated, adding that they are fully confident "in their ability to fulfill their obligations."
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