You're reading: Asset Securitization – What Is It?

Asset securitization is the development and implementation of a set of legal measures aimed at the preservation of property. This practice has evolved in a separate area in connection with the increasing number of raiders, corporate conflicts with Ukrainian partners, lots of losses of already privatized objects, return of previously purchased objects from private property to the State, etc. Practicing for more than 15 years in the field of investment protection, we have noticed a clear link between legal errors made at the stage of investment object acquisition / creation and the seizure of the company at the stage of a corporate conflict or the loss of ownership of the object.

According
to our statistics, owners / foreign investors lost their objects only in those
cases where initially the facilities had legal defects or where in the process
of acquisition of such objects there were
made such legal errors as
incompliance with registration procedure or other statutory provisions,
legal errors in contracts, absence of legal guarantees etc.

In up to
99% cases we can identify the problems and show investors how they can lose one
or another object.

In what ways an asset
may be lost in Ukraine:

• Through
unlawful seizure or raiding;

• Through
corporate conflicts (often with Ukrainian partners);

• Through
unlawful actions of state bodies (e.g., institution of criminal and court proceedings
for the recovery of investor’s property back into the state property,
termination of PPP contracts by the government, withdrawal of licenses,
permits, application of tax arrest etc.).

At what stage of the
investment in Ukraine is it necessary to carry out securitization?
An unambiguous answer – at the earliest
stage, that is, ideally:

• At the Due
Diligence stage before the acquisition of assets / corporate rights;

• At the stage
of making a deal of: the sale, lease, public-private partnership (PPP);

• At the
stage of creating a company with Ukrainian partners, CEO.

The ideal
situation is that the client gets a full picture of all risks before making the
actual investment and a road-map of how to fix the existing errors, provided
that they can be fixed in principle. If there
is no opportunity to fix the errors or to guarantee the client the safety of the
investments in the future, in the adoption of the decision to abandon the idea
of “dubious” investment the client is still in the win position, as
he has preserved his asset.

Yields of asset securitization to business:

1.
Preservation of investments (assets
/ equity)

2.
Receipt of the planned profit

3.
Courage in making investment
decisions

4.
Clear rules of “game” with
Ukrainian partners

5.
Feeling of safety

6. Friendly environment

If we draw
an analogy, asset securitization is the preventive care, a kind of “virus
vaccination”, which provides high guarantees of avoiding
“infection” or “death” in the future, it is an investment
in a healthy business in a country with unusual and unstable “game rules”.
Anyone can enter the Ukrainian market, but the issue is whether the business will
be a success, or whether the planned profit will be received, and the assets preserved
and increased. Based on our experience, I can clearly say
that success will remain with those companies, who plan their actions 10 steps ahead,
that is, who are clearly aware of what kind of market they are entering, who
are aware of the risk of property loss, who turn to the professionals, “proxies”,
whose knowledge and experience can help
to be informed and neutralize possible risks.

We are for
reasonable, balanced and profitable investment in Ukraine.

Syutkin&Partners