A rare management buyout (MBO) in
Ukraine’s banking sector was structured as a
two-step sale to meet capitalisation requirements that took
effect during the sale process. This called for escrow
arrangements – a concept not recognised by Ukrainian
TBIF Financial Services decided to sell its
controlling stake in VAB Bank last year. But the target was
required to increase its charter capital by January 1
– before any sale would receive the regulatory
approvals needed to close.
TBIF was reluctant to fund the capital increase of a bank it
was about to exit, so lawyers arranged for TBIF to subscribe
for the new shares, but for the buyers to prepay into escrow
the UAH 550 million (?51 million)...