Russian VTB Bank transmits debt of KAZ Minerals to the company’s co-owner

The Russian bank VTB has transmitted a $1.8 billion debt in terms of two loans issued to KAZ Minerals to companies Finnaccord and City Invest 6, according to Kommersant, a Russian media outlet. It also noted that Finnaccord is owned by Oleg Novachuk, a co-owner of KAZ Minerals.

The transmission of the debt is directly related to the fact that VTB has been targeted with U.S. sanctions. KAZ Minerals is registered in the U.K. and can’t make any payments in the interest of the bank even if it is a payment on the loan. In this situation, there was a risk of technical default with standard legal consequences for the company.

Novachuk, a final beneficiary of Finnaccord, controls 36.5% shares of KAZ Minerals and is a chair of its board of directors. The remaining 63.5% of shares belong to Vladimir Kim. There is no reliable data about the owners of City Invest 6, even though its managing company is TPM Securities owned by Trinfico Holdings, which has controlled the Moscow football club TsSKA since last year.

As a result of the deal with VTB, City Invest 6 has obtained 99% shares of Baimskaya Holdings Limited, the operator of the Baimskaya copper project in Chukotka also controlled by Novachuk and Kim. The shares were collateral for the loan issued by the bank. The Baimskaya field is considered one of the biggest undeveloped copper fields in the world. Apart from copper, there are also loads of gold.

The Kazakhstani subsidiary of the Russian VTB is the only large financial organization in the country that still supports close ties with Russia and operates as usual. The bank is currently focused on serving external trade between the two countries and issues payment cards of the Russian payment system Mir for those people who regularly travel to Russia.