October 7, 2022

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JP Morgan to sell mega yachts to Russian oligarchs

JP Morgan to sell mega yachts to Russian oligarchs

Gibraltar authorities confiscated Axioma in March after JPMorgan said its alleged owner, Dmitriy Bombiansky, had reneged on the terms of a $20 million loan.

A court spokesperson said the 72.5-meter vessel was auctioned off by the Gibraltar Admiralty Court through a system of closed bidding that will be sent electronically by midday on Tuesday. The court added that 63 bids were submitted for consideration, and the selection process is expected to take between 10 to 14 days.

Nigel Holler, the broker with Admiralty Marshall in the High Court of Gibraltar who led the auction, told the Guardian last week that there had been an “unexpected belated increase by potential buyers” around the world for the vessel.

The boat seats 12 people in six cabins and includes a pool, spa, 3D cinema and water sports equipment.

According to court papers seen by Reuters, JP Morgan (JPM) The company loaned €20.5 million to Pyrene Investments Ltd, a BVI-listed company that was owned by Furdberg Holding Ltd. Furdberg’s owner was Pumpyansky, who acted as a guarantor for the loan.

Newspapers said Pyrene Investments defaulted on the terms of the loan after Pumpyansky on March 4 transferred his shares in Furdberg to a third party and then was penalized, preventing the loan from being repaid.

The 58-year-old, whose fortune is estimated at $2 billion according to Forbes magazine, was sanctioned by Britain and the European Union shortly after the invasion of Ukraine.

Pumpyansky until March was the owner and chairman of the board of directors of the steel pipe manufacturer, a supplier of the Russian energy company Gazprom. The company said he has since pulled out of the company.

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The Axioma is the first luxury yacht to be seized and known to be auctioned since the West imposed sanctions on powerful Russians following the invasion of Ukraine in February.

watershed

Sources close to the operation told Reuters that JPMorgan will only demand the 20.5 million euros owed and that any further proceeds from the sale will be returned to the court for disbursement.

Dozens of yachts and houses Associated with Russian oligarchs have been taken over by world governments since the invasion. British and US authorities said they would seek to send the proceeds of the assets sold to Ukraine.

A Gibraltar government source said the money would likely be frozen rather than handed over to anyone other than the oligarch.

A JPMorgan spokesman declined to comment.

James Jaffa, a lawyer for British yacht specialist Jaffa & Co who represented the Axioma before it was taken over, said the vessel was likely to sell for “significantly less” €20m.

After the auction, he said, the ship broker, crew wages, shipyard and maintenance must be paid before the bank.

However, a successful sale would be a “benchmark” for other banks looking to offset losses by auctioning off repossessed property and other assets of sanctioned oligarchs.

“Axioma will be a watershed moment for assets that have bank financing against them because all the other banks will realize that the asset can be sold and that they can get some or all of their money back,” he said.

He stressed, however, that assets with no financial claims against them and seized by governments due to sanctions alone would be difficult to sell.

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