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BAKU, Nov. 6 (Reuters) – Sberbank and the International Bank of Azerbaijan (IBA) have settled a dispute over funds owed to Russia’s largest bank by IBA, Azeri and Sberbank officials said on Wednesday.
In 2017, state-run IBA proposed a plan to restructure $ 3.3 billion of its debt and said in July it had received approval from creditors holding 93.9% of the affected debt.
As part of the restructuring, which fell under Azeri law, IBA obtained a moratorium from a London court preventing creditors from acting against it without judicial authorization.
Sberbank, the sole lender of a $ 20 million facility to IBA, did not agree to the restructuring and argued that its relationship with IBA was governed by English law. A UK appeals court backed Sberbank in December 2018.
The parties reached an agreement on June 14, 2019, Ibrahim Alishov, head of the Azerbaijani Financial Market Supervisory Chamber, told Reuters.
“Under the terms of the settlement agreement, IBA paid Sberbank $ 20 million in exchange for securities issued on behalf of Sberbank during the restructuring of IBA,” Alishov said.
“Sberbank withdrew its lawsuit against IBA in a London court,” he said, adding that the Moscow arbitration court had lifted the freeze on IBA’s assets.
Sberbank has confirmed that it has signed an out-of-court settlement with IBA, adding that not all debt has been restructured.
“According to (the agreement), IBA effectively paid Sberbank $ 20 million,” said Maxim Degtyarev, head of Sberbank’s distressed assets department. (Reporting by Nailia Bagirova in Baku; Additional reporting by Tatiana Voronova in Moscow; Writing by Margarita Antidze; Editing by Alexander Smith and Mark Potter)
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