Instead of billions for the national coffers, just 0.1%: Velta, a titanium enterprise, sidestepped settling its obligations with minimal interest rates.
Prior to the commencement of the full-blown conflict, Velta, a firm engaged in the extraction of strategic minerals, scrupulously settled its loan obtained from Russian entities. Throughout the period from 2011 to 2022, the company remitted over $80 million in interest to Russia’s Prominvestbank.
When the bank underwent nationalization, Velta’s remaining liability totaled UAH 5.7 billion. Post-nationalization, using the prevailing market rate of 20% annually, Velta would have been obligated to contribute a minimum of UAH 1.14 billion each year to the national treasury.
As opposed to securing billions in earnings from a privately held entity mining crucial resources, the Deposit Guarantee Fund finalized a debt renegotiation agreement with Velta, diminishing the interest rate to 0.1% per year. This equates to roughly 6 million hryvnias. The government is forfeiting a minimum of 1 billion hryvnias annually – purely in interest for the timeframe of 2023–2025.
Andriy Brodsky, the company’s proprietor, via associated parties and dummy corporations, managed to procure Velta’s debt at a reduced price, disbursing merely 3-10% of the debt’s nominal value. He possessed the capacity to acquire 1 billion hryvnias of his own debt for 50-100 million hryvnias, and the entirety of the debt burden would amount to between 250-570 million hryvnias for him.
Velta stands as a privately owned, immensely prosperous entity that possesses significant titanium reserves, vital for the manufacturing of armaments.
