Abramovich-linked companies raised billions via Irish bond market

Companies linked to the sanctioned Russian oligarch, Roman Abramovich, raised billions of euro by way of entities listed on the Irish bond market.

The value of the Dublin-registered bonds has fallen steeply in the period since the Putin government invaded Ukraine, with prices of close to 30 cents in the dollar indicating the level of risk now associated with them.

In announcing its decision on Thursday to place sanctions on the owner of Chelsea Football Club, the UK government cited Mr Abramovich's interests in London-headquartered steel manufacturing and mining company, Evraz plc, which mainly has its operations in Russia.

It also cited his interest in Russian mining and smelting company Norilsk Nickel.

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Both companies have raised billions of euro over recent years by way of bonds listed on the Irish Stock Exchange but mainly traded outside Ireland.

In explaining its reasons for sanctioning Mr Abramovich, the London government linked Evraz with potentially supplying steel for the production of Russian tanks.

It said the Chelsea club owner “is, or has been involved in, destabilising Ukraine and undermining and threatening the territorial integrity, sovereignty and independence of Ukraine, via Evraz plc, a steel manufacturing and mining company in which Abramovich has a significant shareholding and over which Abramovich exercises effective control.”

It said that the company had “potentially” been involved in “supplying steel to the Russian military which may have been used in the production of tanks.” The company has previously denied that this is the case.

Trading suspended

Trading in Evraz plc shares on the London stock exchange was suspended on Thursday as the authorities sought to clarify the effect of the sanctions on the company, which is not itself sanctioned.

Evraz plc raised $750 million (€678 million) by way of bonds listed on the Dublin market in 2017, and a further $700 million two years later. The bonds mature in 2023 and 2024 respectively.

A Dublin-registered special purpose vehicle (SPV) called MMC Finance DAC had bonds worth $3.75 billion listed in Dublin at the end of 2020, according to its latest filed accounts.

The Dublin SPV was incorporated in 2012 for the purpose of raising funds for Norilsk Nickel, which is not a sanctioned company.

The most recent MMC Finance bond listing, for $500 million, happened during 2020, according to the accounts.

The accounts show that during 2020 the company’s auditor was KPMG, Dublin, its firm of solicitors was Arthur Cox, and Cafico International, Dublin 2, provided directors and company secretarial services.

Last week Arthur Cox said it was suspending its work for Russian capital markets clients. Its website showed Norilisk Nickel was among the Irish law firm’s Russian clients.

KPMG has said it is existing the Russian market. Cafico said it was “horrified” by what is happening in Ukraine and is terminating the provision of services to all Russian-linked clients as expeditiously as possible.