Helianthus shares the concerns of the Ukrainian business community regarding draft laws No. 4475 and No. 4398 on the restructuring of foreign currency loans
The Verkhovna Rada of Ukraine adopted as a basis the draft laws on the restructuring of foreign currency loans No. 4475 and No. 4398.
The Ukrainian business community reacted extremely negatively to the initiative to restructure foreign currency loans at a “preferential rate”. Representatives of the financial market and numerous experts have repeatedly brought their position to the authors of the draft laws, explaining that the restructuring should take place on acceptable terms for both borrowers and banks.
The National Bank of Ukraine and the Independent Association of Banks of Ukraine also voiced their claims to these bills, pointing out to the authors unacceptable norms, namely:
– double discounting of loan arrears;
– write-off of part of the debt at the beginning of the loan restructuring;
– limitation of the right of claim of the new creditor by the size of the assignment;
– recognition of a “non-enforceable” enforcement document issued by a court decision to recover a debt on a loan that is subject to restructuring;
The American Chamber of Commerce in Ukraine, the European Business Association, the Independent Association of Banks of Ukraine, the Union of Ukrainian Entrepreneurs and the Forum of Leading International Financial Institutions also detailed their concerns in a collective letter to the President of Ukraine V. Zelensky, the head of the Verkhovna Rada D. Razumkov and the head of the Committee on Finance, Tax and Customs Policy D. Getmantsev.
The text of the letter refers to the inefficiency of the proposed mechanism of preferential restructuring and describes the negative consequences for the budget, since the recalculation of the amounts previously paid by the debtor on the loan proposed in draft No. 4475 will require the repayment of debts at the expense of the lender’s expenses. This will lead to a reduction in the financial result before tax of the lender and to non-payment to the budget of the tax on the lender’s income in the amount of 18% of the repayment amount, and of the exchange rate difference.
Representatives of the international fund “Investohills Helianthus” share the concerns of the business community and believe that such a settlement of the problem of foreign currency loans will destabilize not only the banking system, but also the factoring market.
Andrey Moiseenko, Director of “Investohills Helianthus”, commented on the initiative of the servants of the people: “The restructuring of foreign currency loans on unacceptable terms for the lender is a guaranteed outflow of investment from Ukraine. As a result, this will result in a shortage of credit funds and may provoke another wave of bank failures. Investors who have invested in the Ukrainian market of distressed assets will be forced to defend their property rights in international courts.”