Moscow Arbitration Court on August 22 adjourned until November 18 the case on declaring bankruptcy of Titanium Investments LLC belonging to Dmytro Firtash, an Interfax correspondent told the court.
This decision was made at the request of the administration of the city of Armyansk (Crimea), supported by other participants in the process, including VTB.
The representative of the administration explained that on May 16 an appeal was sent to the Crimean authorities to issue a guarantee for the obligations of the debtor, however, the necessary changes to the Crimean budget can be made only in September.
According to the judge, Crimean authorities submitted a postponement of the hearing to the case file.
Answering a judge’s question, the representative of the Armyansk administration was unable to report whether the Crimean authorities plan to issue a guarantee.
At the same time, the representative of the debtor at the meeting said that negotiations are underway for a peaceful settlement of the dispute. The representative of VTB did not confirm this, but did not refute the fact that negotiations are underway.
“I am not commenting,” he said.
The court adjourned the hearing and ordered the Crimean authorities to submit their position on the dispute to the next hearing.
The court in May attracted the Crimean authorities to participate in the bankruptcy case of Titanium Investments LLC, since the Armyansk city council was unable to provide guarantees for the obligations of the debtor and appealed to the Crimean authorities.
At a meeting in March, a representative of Titanium Investments noted that the company continues to work and is “trying” to pay salaries.
According to the interim manager at one of the previous meetings, as of March, the creditors’ claims have been considered, and a register containing almost 3 billion rubles has been formed. He also stated then that signs of insolvency exist, but he is interested in the restoration of the enterprise.
Earlier, the court decided to conduct bankruptcy proceedings of Titanium Investments LLC as a city-forming enterprise. In accordance with legislation, the bankruptcy of such enterprises provides for the possibility of introducing financial recovery at the request of a public association and under its guarantee. In addition, the law provides guarantees to maintain 50 percent of jobs for up to three years. In case of bankruptcy of city-forming enterprises, their sale is possible under external management and during bankruptcy proceedings.
In accordance with legislation, when considering a bankruptcy case of a city-forming organization, the person participating in the case is the relevant local government body. In this regard, the court then invited the Armyansk city administration to participate in the bankruptcy case of the company.
Speaking at the meeting, a representative of the debtor’s labor collective explained earlier to the court that about 4,000 at the enterprise, which makes up about 60% of the able-bodied population of Armyansk.
The monitoring procedure for Titanium Investments LLC was introduced on February 20, 2018 at the request of VTB. The company’s debt to the bank, included in the register, is 2.5 billion rubles. The legality of these requirements was established in the previous process. Within its framework, VTB collected $46.2 million, including $6.8 million, from Ukrainian Chemical Products, to which the bank issued $39.39 million by June 1, 2016 under an agreement signed on April 24, 2015. Titanium Investments initially acted as a third party in the case, and then the court made the company co-defendant.
Representatives Ukrainian Chemical Products and Titanium Investments said earlier at a court hearing that the loan was not repaid due to the annexation of Crimea by Russia and the imposition of international sanctions. These companies filed a counterclaim against VTB to invalidate the loan agreement, but the court rejected it.
Ukrainian Chemical Products is the former Ukrainian Crimean Titan PJSC, which in 2014 was re-registered from Armyansk to Kyiv and later renamed.
Titanium Investments LLC was registered in June 2014. According to the analytical system “SPARK-Interfax”, the company belongs to the Cyprus Letan Investments Limited – the founder of the Austrian holding company Dmytro Firtash – Group DF International GmbH.
Since the fall of 2014, the property of the Crimean Titan plant located in Armyansk, a large producer of titanium dioxide, has been in a long-term lease from Titanium Investments. Currently, the company is called the Armyansk branch of Titanium Investments LLC.
In October 2018, the enterprise resumed operation after a month and a half of downtime, which was associated with a sharp deterioration in the environmental situation in Armyansk. One of the possible causes of emissions of chemicals into the atmosphere was evaporation from the acid accumulator near the plant. Almost simultaneously with the launch of the enterprise, its administration announced that until 2021, 1 billion rubles would be invested in improving the environmental safety of the plant.
