9 June 2022
R&I Update - June 2022 – 2 of 4 Insights
The UK Court recently granted a special administration order over Sberbank CIB (UK) Limited (the Company) following the impact of Russian sanctions imposed by the UK on its indirect Russian parent, PJSC Sberbank.
PJSC Sberbank is subject to an asset freeze in the UK and the Company cannot carry on its business without the benefit of licences granted by the Office of Financial Sanctions Implementation (OFSI).
The Company had faced difficulty engaging professionals willing to act. As an OFSI licence was about to expire, the directors applied for an urgent special administration order on grounds that the Company appeared or was likely to become unable to pay its debts (Ground A) and/or it was fair to put the Company into special administration (Ground B).
The Court was satisfied with Ground A and B and placed the Company into special administration.
While the Company was balance sheet solvent, "...Basically, as a result of the sanctions, the company cannot function in any normal way and has no means to pay its debts".
The operational difficulties were such that it was 'fair' to place the Company into administration. It was in the interests of creditors that administrators were appointed to engage with banks, apply for licences and ensure compliance with sanctions while winding up the Company in an orderly way.
To discuss the issues raised in this article in more detail, please contact a member of our Restructuring & Insolvency team.