The Moscow Arbitration Court has declared V.M.H.Y. Holdings, a Cyprus-based company owning 10.64% of the Azbuka Vkusa retail chain, bankrupt. The ruling follows bankruptcy proceedings initiated against the debtor, leading to claims exceeding 18.66 billion rubles from M2M Private Bank, currently represented by the Agency for Deposit Insurance (DIA).
The court's decision was reported by Russian media, highlighting the ongoing issues surrounding V.M.H.Y. Holdings and its financial obligations. In May 2024, the DIA appealed to the court, seeking to recover approximately 18 billion rubles after V.M.H.Y. failed to fulfill its obligations regarding loan repayment and interest.
As of now, the claims listed in the creditors' register include 1.54 billion rubles of principal debt and 1.77 billion rubles in interest. Additionally, penalties for violating repayment terms have mounted to a staggering 15.35 billion rubles.
V.M.H.Y. Holdings has been in forced liquidation since 2018 according to a ruling from the Nicosia District Court, mirroring the bankruptcy process seen within Russia. Yet, over seven years later, the company has yet to settle its debts with creditors. There are ongoing concerns regarding the efficiency of bankruptcy proceedings, given that V.M.H.Y. is grappling with two simultaneous bankruptcy processes in Russia and Cyprus.
Meanwhile, the share held by V.M.H.Y. in Azbuka Vkusa is estimated to be worth between 3.7 and 4.3 billion rubles. This asset could play a significant role in recovering some losses for creditors. As the bankruptcy proceedings unfold, assets will be assessed and allocated among creditors, including the examination of V.M.H.Y.'s local assets as part of its bankruptcy estate.
In recent updates, there have also been reports of negotiations involving Severgroup, led by Alexey Mordashov, who is said to be interested in acquiring the Azbuka Vkusa chain entirely. Such developments could reshape the retail landscape, depending on how quickly a resolution is reached regarding the bankruptcy proceedings.
The situation is compounded by the fact that the DIA has not received any proposals for out-of-court settlements from V.M.H.Y. Holdings, indicating a potential impasse in resolving the financial challenges faced by the company.
Industry experts observe that this bankruptcy may set a precedent for how similar cases are handled in Russia and could influence the operations of other entities involved in significant financial distress.
Given the challenges that lie ahead, creditors may face a complex landscape as they strive to recover their investments. The dual bankruptcy scenarios create uncertainty, with the ongoing legal processes necessitating careful navigation to ensure fair outcomes.
The fate of V.M.H.Y. Holdings serves as a potent reminder of the intricate relationship between corporate finance and legal frameworks. With eyes now on the unfolding bankruptcy proceedings, many within the industry are left wondering how the story will end.
As an additional layer, the financial turbulence surrounding M2M Private Bank, which has been recognized as bankrupt since 2017, underscores the interconnectedness of financial institutions and their affiliates, complicating matters further.
Ultimately, all parties involved will be keenly watching the court system as it seeks to untangle this web of financial commitments, obligations, and competing claims, in what promises to be an impactful case within the Russian market.
