The owner of the Gulliver and Eldorado shopping malls is at risk of losing assets. Viktor Polishchuk is once again failing to make loan payments to state banks. What does this mean for his business?
Viktor Polishchuk, the owner of the Gulliver shopping and entertainment center, is once again in talks with state-owned banks to restructure his loans. Since the start of the war, his companies have not been paying their debts, which the businessman attributes to losses from the Russian invasion. Forbes discusses the potential threat to Polishchuk's business and the actions that state banks might take.
Viktor Polishchuk's companies, which oversee the BFC Gulliver, the Eldorado electronics and household appliances network, and several large warehouses, have not been servicing their loans from state banks since the war began. As a result, they could lose collateral, according to four individuals knowledgeable about the situation, as reported by Forbes. These individuals are from the commercial real estate market, Oschadbank, and Ukreximbank, which provided loans to the businessman.
State banks are considering their options regarding the loans, which include seizing collateral, selling the loan rights, or agreeing to another restructuring.
Will the institutions seize Polishchuk's main assets and what will this mean for his business?
How did Oshchad and Exim finance Polishchuk's business?
This is the second time that Polishchuk's companies' loans in state-owned banks have become problematic. The businessman previously restructured Eldorado's debts to Oschadbank in 2018, and Gulliver's debts to Oschadbank and Eximbank in 2020. The RLC company, which manages Polishchuk's warehouse business, was also funded by Oschadbank.
The terms of the restructuring agreement for Eldorado's $120 million debt are unknown. The managing company of Gulliver, Three O, was able to extend the loan until 2044. Notably, the controller of “Three O” is not Polishchuk, but Vyacheslav Ignatenko. Polishchuk established his ownership by providing a personal loan order, according to two sources from Sberbank and the NBU. Polishchuk also personally negotiated the restructuring in 2020, as revealed by a manager from one of the state-owned banks.
The Gulliver complex, which opened in 2013, is Polishchuk's most valuable asset. In 2021, Forbes valued “Gulliver” at approximately $100 million. Polishchuk's overall wealth, which also made him the top rentier, was estimated at $275 million.
Gulliver was constructed with loans: Oschadbank provided the majority of $441 million ($353 million), and about a quarter was funded by Eximbank. Polishchuk acquired the unfinished asset in 2012. The previous beneficiaries of the complex were Vagif Aliyev, Aleksey Kucherenko, and Sergey Veselov, as reported by Kommersant.
Repayment was initially scheduled for 2025, but after the 2014-2016 crisis, the debt went unpaid. It was during this period that Polischuk's Mikhailovsky bank went bankrupt, and the NBU uncovered large-scale fraud involving clients' funds. Polishchuk is not among the suspects in this case.
In 2018, state-owned banks attempted without success to sell the rights of claim on the Gulliver loan (the starting price was UAH 18 billion), but no one was willing to become Polishchuk's new creditor. Why? One of the Forbes sources involved in the negotiations explained, “Gulliver” was not pledged as an integral property complex. “The new owner would not be able, for example, to use elevators or would face other obstacles to work.”
Will the state-owned banks take Gulliver and Eldorado's assets, since Viktor Polishchuk is not paying again?
After the start of the war, payments on Gulliver, Eldorado and warehouse complexes stopped, the official says on the condition of anonymity in one from state banks. As collateral, respectively, the CFC itself, goods in terms of turnover and the warehouse itself act as collateral. In 2021, Forbes valued Eldorado at $80 million, the warehouse business at about $60 million.
Currently, the businessman is trying to negotiate with creditors. His argument is a significant loss of business. This is especially true for warehouses: in mid-March, a large-scale fire broke out in one of the complexes near Brovary, Kyiv region, due to Russian shelling. More than 70% of the warehouse space used by the Eldorado network was located in the Kyiv region.
“One of the warehouses in the Brovarsky district was damaged, so we were forced to urgently evacuate the goods to the west of the country” ,” the network's press service said in a written comment.
Since the beginning of the full-scale war, the media have hardly mentioned Polishchuk. The only episode – in mid-March, they tried to take three Rolls-Royces out of Ukraine. “Luxury vehicles registered to a Ukrainian private company… According to available information, the beneficiary of the company is a person associated with one of the officials of the Russian Federation,” the SBI said then.
Later, the Mind edition, citing the State Bureau of Investigation, wrote that two cars belong to Polishchuk. Why did the State Bureau of Investigation indicate a connection with a Russian official? The probable reason is that the Ukrainian media, in particular Ekonomicheskaya Pravda, wrote that Polishchuk's wife, Lilia Rezvaya, is the niece of the wife of ex-President of Russia Dmitry Medvedev. Rezva herself is not on the list of sanctioned persons of Ukraine.
According to Forbes, Polishchuk's income from rent in 2021 was $70 million. For example, among the tenants of premises in the 35-story Gulliver are Coca-Cola, Grammarly, Ciklum, Louis Dreifus, Uber. Now the situation is probably worse. In November, according to the consulting company UTG, the number of visitors to the capital's malls was 35-45% lower compared to last year.
Will state banks agree to restructure Polishchuk's debts again? Interlocutors in both Oschada and Exim say that they have not yet made a final decision. Eximbank is considering selling its share in the loan under Gulliver, while Oschad does not rule out the recovery of assets.
“We don’t really like that in recent years, judicial practice to satisfy the rights of claims on mortgages shows no in favor of the creditor,” says a bank official who asked not to be named in this article.
At the time of publication, the Gulliver press service did not respond to Forbes’ request for comment. Eldorado reported that they would not comment on this topic.
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