Landmark Transaction Signals Direct Foreign Investment in Ukraine and the Sale of More than $3.5 Billion of NPLs and REOs in 18 Months for Ukraine’s Regulators and Banks
July 20, 2020 U.S./Kyiv Ukraine – First Financial Network, Inc. (FFN), a leading international loan and real estate sale advisor, has completed the successful sale of the Chornomorets Stadium in Odessa, Ukraine, on behalf of the Deposit Guarantee Fund (DGF) and the intervened ImexBank, to Allrise Capital, Inc., of Irvine, CA. The $7.29 Million transaction was completed and closed on July 16. The sale process included an extensive international marketing campaign and an online due diligence and bidding process for registered and vetted investors conducted by FFN on its secure, EU compliant international sales platform on May 22.
Buyer Allrise Capital plans to field a world-class soccer team at Chornomorets Stadium, make improvements to the stadium facilities to enhance the fan experience, and program events to activate the complex year-round.
The stadium complex is a marquis real estate asset which includes a 35,000-seat modern sports and events stadium, plus 850,000-square feet in commercial real estate, including a 150-room four-star hotel, an office/business complex, retail, spa, cultural offerings, and a large underground parking facility, all located in the heart of Odessa’s central park near the seaports. Odessa, Ukraine’s third largest city, is situated on the Black Sea coast and is the primary in-country vacation site, known for its temperate climate, beaches and resort setting.
This transaction follows FFN’s previous successful sales and closings of five Non-Performing Loan (NPL) portfolios totaling over $3 Billion in balances on behalf of the DGF and the National Bank of Ukraine (NBU).
“This transaction aligns with one of Ukrainian President Volodymyr Zelensky’s primary economic goals of attracting direct foreign investment and demonstrates the nation’s ability to sell assets to the international community,” said John Morris, President, First Financial Network. “We have been working diligently on behalf of our clients in the region, the Deposit Guarantee Fund and the National Bank of Ukraine, to build momentum and interest in Ukraine investment opportunities. The NPLs and real estate properties have been sold through our extensive marketing and due diligence efforts and the proven success of our secure online sales platform with the support of the DGF’s and NBU’s sales’ teams and executive leadership.”
The buyer, Allrise Capital, is a multi-strategy investment company primarily focused on real estate, distressed debt and special situations opportunities in the U.S. and select Eastern European markets.
“Ukraine represents a unique investment opportunity as the country continues to undergo a fundamental democratic and economic transformation, integrating deeper into the global economy,” said Ruslan Zinurov, Chief Executive Officer of Allrise Capital. “We are buoyed by Ukraine’s structural reforms and commitment to protect property rights and improve the business climate for international investors.”
Mr. Zinurov said his firm has extensive experience investing in Ukraine through NPL and real estate acquisitions, and has plans to further increase its direct investments in the stadium complex and other assets in the region.
“We are energized by the opportunity the Chornomorets Stadium offers to create a truly outstanding and profitable asset for Ukraine, and we look forward to sharing our plans shortly,” Mr. Zinurov said. “Allrise Capital, with in-house expertise in the culture, language and business environment of Ukraine, is uniquely suited to take control over this marquis asset and transform it to make a significant contribution to the city of Odessa and the nation.”
FFN is preparing for additional NPL and real estate asset sales this year on behalf of the DGF and the NBU. In addition, FFN is preparing to assist other Ukrainian financial entities in the analysis, valuation, marketing and sale of additional assets this year.
FFN was originally approached by the United States Department of Treasury’s Office of Technical Assistance in 2015, in conjunction with the International Monetary Fund and the World Bank, to provide advisory services regarding the banking crisis in Ukraine and contribute its expertise in valuing, preparing, marketing and selling NPL and real estate portfolios. The company also has extensive experience selling similar portfolios in North America, South America and elsewhere in Europe.
For additional details regarding these investment opportunities, please call 405.748.4100 or register at www.ffncorp.com.