Ukraine’s Finance Ministry at the end of 2016 additionally injected 107 billion UAH into PrivatBank (Dnipro), Fitch Ratings has said in a press release.
At the end of 2016 Fitch Ratings downgraded ratings of the financial institution.
Fitch said that in December 2016 the Finance Ministry paid 107 billion UAH for shares of PrivatBank. The positive results of the additional capitalization of the bank, including the issue of currency pegged government domestic loan bonds, would help the bank to provide for liquidity of its currency pegged liabilities and expect that the bank’s ratings would be revised upwards to the sovereign level during the next revision by Fitch.
As reported, Ukraine’s Cabinet of Ministers under a proposal of the National Bank of Ukraine (NBU) and shareholders in PrivatBank on December 18, 2016 decided to nationalize the financial institution. The volume of domestic loan bonds to be issued for the purposes was assessed at 116.8-148 billion UAH.
The government on December 19, 2016 approved that the Finance Ministry would buy all PrivatBank’s shares for 1 UAH.
The Individuals Deposit Guarantee Fund acting as a temporary administrator of the bank, on December 31, 2016 increased its charter capital by 29.438 billion UAH, to 50.695 billion UAH thanks to the purchase of additionally issued shares. These shares were later sold to the state for 1 UAH.
Then the ministry was to take part in the additional capitalization of PrivatBank via acquisition of the additionally issued shares at the cost not exceeding the minimum need in capital calculated by the NBU.
The government instructed the Finance Ministry to issue government domestic loan bonds in the amount of up to 116.8 billion UAH, with maturity up to 15 years and at no more than 10.5% per annum. The bonds will be used to pay for the additionally issued shares of PrivatBank. (Interfax/Business World Magazine)