The International Committee of Creditors and minority stockholders in defaulting Mriya agribusiness whose liabilities exceed $1.3 billion have asked Ukraine's leaders to ensure an investigation in the activity of the company and its founders – the Huta family.
The creditors also asked for support of their efforts to ensure the transparent restructuring of the company’s debts and hiring a new team of professional managers, the creditors said on Wednesday in an open letter addressed to the president, the premier, the central bank’s governor, the Security Service of Ukraine, the Prosecutor General’s Office, and the Interior Ministry.
“The goal of such an investigation is to safeguard the legitimate rights and interests of creditors and minority shareholders in the company, as well as to preserve its assets and prevent possible abuse,” the letter reads.
The creditors claim that despite the announcement by Mriya in August that it could not service its financial liabilities, the founders and controlling shareholders – Ivan Huta, Klavdiya Huta, Andriy Huta and Mykola Huta – continue accumulating some assets outside the company, including a commercial bank, a logistics operator, a land plot at the Yuzhny Port, a large dealership, a Swiss-headquartered grain trader, and some real estate in Ukraine and abroad.
“This had been happening when the company has never paid dividends to its shareholders. The Creditors Committee supports conducting an immediate independent investigation to determine how the Hutas were able to accumulate considerable private means when the Mriya company was on the verge of bankruptcy,” the letter says.
The authors of the letter indicate that they jointly own more than 50% of the company’s loan participation notes (LPN) issued in April 2013 to the tune of $400 million. They estimate Mriya’s total debts before all the financial creditors, including the guarantees provided to the companies affiliated with the Huta family, at about $1.3 billion amid the company’s being in default.
The debts include $572 million owed to domestic and foreign banks, $472 million to the Ukrainian and international investment funds, $122 million to the International Finance Corporation (IFC), and $109 million to European export credit agencies.
The letter was signed by Ashmore Investment Management Limited (as an agent on behalf of several funds and investors), T. Rowe Price Associates, Inc. and Greylock Capital Management, LLC (as investment advisers to a number of funds and investors holding Mriya’s LPNs), CarVal Investors, Franklin Resources, Inc., Prosperity Capital Management, Santa Lucia Asset Management Pte. Ltd.
They claim their total investment in the Ukrainian economy is $2.7 billion.
