Dmitry Magonya commented on the barrier currency options of Suhoi and Sberbank
Transneft is trying to challenge the loss of more than RUB 75 billion on option transactions from 2014. Bloomberg reported the news, and a source close to the state-owned company confirmed the information. On 11 January, Transneft filed a lawsuit in the Moscow Arbitration Court against Sberbank to recognize the transaction as “null and void,” but details about the claim remain undisclosed.
During 2014, “to reduce the adverse effects associated with the possible devaluation of the dollar, the group entered into put options and call options for USD 2.727 billion, with execution dates in August-December 2014,” according to the IFRS 2014 report of Transneft. A representative of Transneft explained that the firm concluded the transactions to minimize currency risks arising due to the presence of foreign currency debt (a Chinese loan of USD 10 billion, through 2029, and Eurobonds for USD 1.05 billion that mature in 2018) as well as temporarily free funds in foreign currency. In 2014, the dollar-ruble exchange rate increased by 1.7 times, and by the end of the year, it reached RUB 56.65. As a result, the net loss of Transneft on the derivative financial instruments amounted to RUB 75.289 billion. A representative of Maxim Poletaev, the first deputy chairman of Sberbank, told Vedomosti that “we confirm the fact that a lawsuit has been filed. On other information: no comment.” A representative of Transneft declined to comment.
