Swiss court froze Kernel Holdings SA accounts

The Civil Court of First Instance of the Swiss Canton of Geneva froze the accounts of Luxembourg's Kernel Holding SA, the holding company of the Kernel Group, and related companies, RBC reports referring to the Court decision.

Assets were frozen at the suit of Mikhail and Inessa Stadnik, who sold two companies to Kernel in 2012. Their representative confirmed the arrest of these assets by the Geneva Court.

A long-held lawsuit was the reason for the freezing of the accounts. In 2012, Kernel bought Stiomi Holding and Khmelnytsky Bread Factory from the Stadniks.

The agricultural holding agreed to buy the assets for USD 60.9 mln, but under the terms of the agreement, in 2012, the company paid the Stadniks only 40% of the amount, USD 24 mln. The rest was to be paid under specific conditions set by Stiomi Holding, Kernel said in its 2018 report.

"The parties had a disagreement over the performance of the contract and in December 2012 the Stadniks filed a claim against Kernel with the London Court of International Arbitration. The proceedings lasted several years. In February 2018, the court partially granted the claim of the former owners of Stiomi Holding, obliging Kernel to pay them almost USD 33.5 mln, including interest on the awarded amount and court costs. The agricultural holding partially appealed the decision, but in December 2019 the court rejected its counterclaims," the message reads.

Moreover, according to the decision, the accounts of Taman Grain Terminal Holdings Ltd. of Cyprus, the owner of the grain terminal in Taman, were also frozen.

This is evidenced by a letter from UBS Switzerland AG Deputy Director Patrick Mayer, which is in RBC's possession.

"In April 2019, VTB Group announced its interest in Kernel's stake in the grain terminal in Taman. Assets in the grain market is one of VTB's strategic interests: last year, the bank announced plans to create a joint grain holding that would be able to consolidate grain export and storage assets and "take over the functions of a leading trader of Russian wheat," RBC writes.

The Group expects to finalize the deal on acquisition of 50% of the grain terminal in Taman from Kernel by the end of the year, VTB President Andrey Kostin said in October 2019.

However, the parties failed to agree on a price, the first deputy chairman of VTB Yuri Soloviev admitted in January 2020 at the World Economic Forum in Davos.

"Maybe we can't agree," Interfax quoted the top manager. Soloviev noted that VTB has enough capacity to handle grain at underloaded terminals and the bank does not intend to "buy (this asset) at any price, only if it makes commercial sense."

The VTB press service refused to comment on how the freezing of the terminal owner's accounts would affect negotiations with Kernel.

The press service of the agricultural holding also did not respond to RBC's request. UBS neither confirmed nor denied this information about its client.