Bankruptcy prevention measures for SM BANK JSC (Sevastopol)

At its meeting on 19 June, the Bank of Russia’s Board of Directors approved amendments to the Plan for the Participation of the State Corporation Deposit Insurance Agency in the Implementation of Measures to Prevent the Bankruptcy of SM BANK JSC (Sevastopol) (the Investor — Russian National Commercial Bank (PJSC)).

These amendments imply that the Agency will allocate financial aid to SM BANK JSC (hereinafter, the Bank) using the loans granted by the Bank of Russia.

Funding will be provided as loans totalling 740.9 million rubles with a 10-year maturity. These funds will be used to cover the imbalance between the fair value of the Bank’s assets and liabilities and to increase the Bank’s authorised capital.

The analysis of the Bank’s financial standing revealed that this imbalance amounted to 163.2 million rubles. The size of the imbalance used to calculate the amount of funding to be allocated takes into account the debiting of the balances from the accounts of the persons who were controlling the Bank’s operations prior to the approval of the Plan for the Participation of the Agency in the Implementation of Measures to Prevent the Bankruptcy of the Bank (pursuant to Clause 12.1 Article 189.49 of Federal Law No. 127-FZ, dated 26 October 2002, ‘On Insolvency (Bankruptcy)’), which reduces the allocated amount of financial aid by at least 355 million rubles.

In addition, the plan also provides for the reorganisation of the Bank through its merger into the Investor.

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