The companies were sanctioned by the US Department of Treasury’s Office of Foreign Assets Control (OFAC).
In 2023, the High Court ordered that GTLK Europe and GTLK Europe Capital be wound up. The companies were liquidated on foot of an application from their creditors, who were owed close to $180m (€153m).
The largest unsecured creditor of GTLK Capital, and therefore the group, is its bondholders. The aggregate outstanding principal amount of bonds issued by the companies is $3.25bn.
The two insolvent Irish firms controlled assets including about 70 jets and 19 sea-going vessels valued at about €4bn. It is the biggest ever liquidation in Ireland.
The companies’ activities were hit by sanctions imposed on Russian entities and individuals following the invasion of Ukraine. The firms are part of Russian joint stock company GTLK, which is wholly owned by the Russian government through its ministry of transport and ministry of finance.
As of the end of May, the joint liquidators – Damien Murran and Julian Moroney, of Teneo’s Dublin office – had secured just over €60m in realisations and “second realisations” of €276.2m.
There was €190.6m in cash on the books at the end of last month. While the joint liquidators said that “substantial progress” was made following their appointment to secure necessary licences and permissions from various national regulators to perform the primary tasks of the liquidation, the narrowness of the licence from the OFAC has slowed their work.
“The limitations of the licence have resulted in considerably more time being devoted to standard process tasks,” they said in a liquidation report filed this week. “Simple matters, such as the collection of cash receipts, have become arduous tasks taking more time than reasonably expected.
“The limitations have also gone further, impacting strategic delivery. For example, in isolated instances interested parties have withdrawn from sales processes.”
The liquidators said that in order to address these issues, they have filed about 17 further applications with the OFAC for additional licences.
“However, these are taking time to obtain responses,” they note.
“A delisting application to remove GTLK Europe, GTLK Capital and GTLKE Middle East FZCO from the US sanctioned entities list was filed on behalf of the joint liquidators with the US State Department in May 2024,” the latest report adds.
“The ongoing practical challenges in the liquidation as a result of sanctions experienced over the last number of months highlight the significant value that a successful OFAC delisting would garner for the estate in mitigating certain regulatory delays.
“However, similar to the OFAC licence applications, it is taking time to obtain responses on this delisting application.”
The liquidators said they are making “significant progress” in the liquidation of GTLK Europe and the realisation of interests in its subsidiaries, “which will ultimately translate into recoveries for the benefit of the company creditors”.
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