Kremlin-linked leasing company GTLK is considering issuing “replacement bonds” denominated in roubles as a substitute for the existing $3.2 billion (€3 billion) Eurobonds issued by its two Irish subsidiaries and held by international creditors. This move comes after the High Court in Dublin initiated liquidation proceedings against GTLK Europe in June.
Mikhail Kadochnikov, a director at GTLK, announced that the group intends to replace six existing Eurobonds issued by Irish subsidiaries GTLK Europe DAC and GTLK Europe Capital DAC approximately six to eight weeks after the new bonds are registered in October. These replacement bonds will be serviced in roubles at Russia’s Central Bank rate on the coupon date, with payments made accordingly. GTLK assures that the parameters of the new issuance will closely resemble those of the existing Eurobonds.
Mr. Justice Conor Dignam had previously appointed liquidators to the insolvent firms after dismissing their request to enter examinership. The companies, valued at an estimated $4.5 billion (€4 billion), are undergoing the largest liquidation in the history of Ireland. The firms sought court protection from creditors following sanctions imposed on Russian entities after the Ukraine invasion, but their request was rejected.
Creditors, including Dublin-registered Trinity Investments DAC and Allestor Europe Multi Asset Portfolio, are involved in Irish legal actions to recover debts related to the Eurobonds. GTLK’s Irish operation, established in 2012, is a wholly owned subsidiary of the GTLK State Leasing Company, with several directors of the parent group holding positions in the Kremlin.
Aircraft account for approximately 90% of GTLK Europe’s portfolio, with the remaining 10% covering ocean vessels.