In 2015 and early 2016 Ukrainian banking sector continued struggling against severe financial crisis caused by deteriorating economy, war in Eastern Ukraine and a certain degree of political instability in the country. In this environment, the most significant initiatives of the National Bank of Ukraine were aimed at cleaning-up the banking sector and withdrawal of captive banks from the market. Hence, most of Ukrainian banks focused on survival and keeping their heads above the water. However, such turbulence and challenging environment led to significant transformations of the market, change of the players and the rules of play.
As a result, finance lawyers remained busy, implementing debt restructuring transactions and supporting acquisitions in the banking sector of Ukraine. Although most of the banks decided to substantially reduce their lending activities until revival of the market, EBRD and IFC kept supporting Ukraine’s struggling economy by granting new financing and refinancing to suitable borrowers (e. g. a USD 250 million loan granted by IFC to Myronivskyi Hliboprodukt and a USD 300 million loan granted by EBRD to Naftogas).
Moreover, the following landmark transactions implemented in 2015-2016 were first of a kind and established certain trends in the market:
- Restructuring of sovereign and quasi-sovereign debt;
- Acquisition of insolvent Astra Bank (formerly owned by Mr. Mykola Lagun) by US private equity house NCH Capital from the Deposit Guarantee Fund.;
- Acquisition of Ukrsotsbank (being a Ukrainian subsidiary of UniCredit Group) by Alfa Group (the transaction is supposed to be completed by the end of 2016).