Cyprus officials push ahead with debt restructuring of Mriya


By Andri Antoniou

By the time the founding members of the Mriya Group, one of Ukraine’s largest agricultural operators whose holding company is Cypriot registered, finished their “looting campaign”, it was left with debts in excess of $1.3 billion.

andri antoniouWith the collapse of the group two years ago, creditors – many of whom are represented by Cypriot banks as well as international investors – were left looking for ways to salvage what was possible from the orchestrated fraud of the company’s founders Ivan and Klavdiya Guta.

The trustee of the group of bondholders that had provided investment filed an application on January 22, 2015 with a court in Cyprus, where the holding company is registered, seeking a winding up order against Mriya Agro Holdings Public Ltd (MAH) and simultaneously filed an application for the appointment of a provisional liquidator.

On January 26, 2015 the Nicosia district court appointed Chris Iacovides of Cyprus-based CRI Group Ltd as provisional liquidator. He appointed new directors of the 18 Cypriot subsidiaries and through powers of attorney the new management team were authorised to manage the affairs of the 140 Ukrainian subsidiaries, securing their ongoing trading and ensuring 2000 jobs were not lost.
Today, the group boasts a forecasted turnover of over $114m for the 2016 harvest, whilst having received working capital of $25m in 2015 and a further $41m out of the €46m approved for 2016 by investors.

MAH was wound up by Nicosia district court on May 11, 2016, leading to the appointment of the official receiver as liquidator, simultaneously terminating Iacovides’ appointment. The official receiver’s office then filed an application – the first of its kind in Cyprus – to appoint Iacovides as special manager with all the powers of the liquidator. This came into effect on May 19 2016.
Efforts are now being focused on both restructuring the group’s debts whilst investigating the actions of the previous management and taking steps to bring to justice those responsible for defrauding creditors, spanning several jurisdictions including Ukraine, Cyprus, UK, Russia and Switzerland, of hundreds of millions of dollars.

“This is an unprecedented case when the banking community and Eurobond holders were able to remove a fraudster and negligent borrower from the business and not lose the business in the process,” the governor of the National Bank of Ukraine, Valeria Gontareva, told Ukrainian TV recently. “This is an example of how in Ukraine, as elsewhere in the world, an unpaid creditor must have the right very quickly and efficiently to take control of the business before it has been destroyed.”

Criminal proceedings are ongoing both in Cyprus and Ukraine against the previous management of the group and Ivan and Klavdiya Guta’s son – often deemed the “mastermind” behind the orchestrated fraud – who has fled to Switzerland. It is believed that the police investigation currently ongoing in Cyprus, instigated by Iacovides, will lead to international arrest warrants being issued against those responsible.

Meanwhile actions to restructure the group’s debts are continuing through the combined efforts of the special manager, and his legal team at Dentons, the Ukrainian law firms Sayenko Kharenko and Avellum, the UK law firms Latham Watkins and Hogan Lovells, the consultants, Rothschild and ICU, and members of the management team. At the beginning of September, the key restructuring terms and conditions were agreed between Mriya and the coordinating committees of banks and bondholders. According to the restructuring terms, Mriya’s operating group debt will be reduced to a total sustainable debt level up to $330 million, a reduction of 70 per cent of the total debt, while creditors will take control of equity in the group.

“We very much welcome what Mriya has been able to do. I think that this is really a huge breakthrough,” said Gontareva. “I can say that this is the first story of this kind on our territory. So the national bank very much welcomes Mriya’s debt restructuring.”

More details can be found on and

(*) Andri Antoniou is a solicitor of the Senior Courts of England and Wales and a Licensed Insolvency Practitioner at CRI Group which specialises in all aspects of Personal and Corporate Insolvency, Recovery Renewal & Reconstruction.


About Author

Stelios Orphanides is a journalist at To contact Stelios Orphanides: [email protected]