Argentem Creek Partners
| Argentem Creek Partners |
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| Argentem Creek Partners (ACP) is a US based investment company with resources in Abu Dhabi, Buenos Aires, London, Minneapolis, and New York. |
Argentem Creek Partners LP is an emerging markets specialist investment firm. The Firm invests in special situations, private credit, high yield, and bespoke capital solutions across the capital structure. Argentem focuses on delivering value for investors, partners, and the local communities.
ACP is recognized for investing in complex situations and or challenging markets and jurisdictions. The firm specializes in finding strategic and high-quality assets (in sectors such as natural resources, production, agriculture, and related infrastructure) that provide significant value upside. The investment strategy is executed through leading and implementing restructurings of balance sheets, capital structures, governance, or identifying market dislocations. The team accredits its successful track record to a disciplined, bottom-up investment approach and an extensive network of relevant local global partners.
Argentem Creek Partners was founded in 2015 by Daniel Chapman and his team at Black River Asset Management, a former subsidiary of Cargill Inc. Since inception the team has invested $2.5bln across over 75 corporations and 20 countries.
Argentem Creek Partners in Ukraine
Argentem Creek Partners has been operating actively in the Ukrainian market since its inception in 2015 and the team has had experience in Ukraine starting a decade prior. ACP has invested more than 600 million US dollars in various sectors of the country's economy, namely, in the development of the food, transport, and metals industries.
ACP seeks special situations opportunities, which can include distressed situations where the team helps restructure companies that have limited access to international investment or financing but have good management and prospects. ACP uses investing to impact the development of companies positively and lastingly in its portfolio with an emphasis on governance, transparency and employing best business practices.
ACP is known in Ukraine due to its successfully implemented investment projects for enterprises such as Mriya, Interpipe, DTEK Energy, Lemtrans, as well as other projects for leading companies.
Argentem Creek Partners Projects in Ukraine
GN Terminals (GN Terminal Enterprises Ltd) is registered in Cyprus and is part of the GNT Group. This is a vertically integrated agri supply chain and services group, including sea freight stevedoring through the port of Odessa. The company owns the Ukrainian OOO Olimpex Coupe International. The ultimate beneficiaries of Olimpex Coupe International and the GNT Group holding are Vladimir Naumenko and Sergei Groza. GN Terminals processes and stores agricultural products in Ukraine through an internal network and operates some of the largest export terminals in Ukraine. Currently, Argentem Creek Partners is an active participant in the grain corridor. ACP has a significant stake in the capital structure of GNT.
In December 2019, Argentem Creek Partners invested in the development of a large grain marine terminal and logistics hub in Odessa (GN Terminals).
ACP's initial goal of improving governance and transparency of GN Terminals' operations has not been achieved to date and in fact the company chose to use the war to become less transparent resulting in ACP’s decision to enforce its security.
The regional head of ACP - John Patton spoke in detail about the current situation with the GNT Group in an interview
Which strategies are used by Naumenko and Groza
A journalist's investigation was published recently. It indicates that thanks to the received loan funds, the owners of the GNT Group repaid their debt to the EBRD, expanded their business, and began to engage in trading. At the same time, while making a profit, Naumenko and Groza took one’s time to give money to creditors. As said by the journalist: "Odessa’s use all the classic legal tools that exist in Ukraine to avoid paying debts".
According to his opinion, the general strategy of actions of Naumenko and Groza consists of the following steps:
- No way to repay debts.
- To register all property to other companies and continue to work.
- Investors should throw empty "shells", which previously had the results of the terminal, grain, and equipment.
As the journalist explained, the owners of the GNT Group have registered business with many companies, creating a kind of "impassable legal jungle." Thus, Vladimir Naumenko and Sergey Groza have reached the point that they actually do not have property themselves, because it has been reissued to other structures.
Interpipe Group is a Ukrainian manufacturer and supplier of steel products. The company operates five steel mills in Ukraine that process scrap and produce railway wheels, stainless steel pipes, ERW steel pipes. The company’s steel production exceeds 750,000 tons per year. ACP invested in Interpipe in 2017 and worked with other stakeholders to lead the restructuring that helped the company recover from the losses in the Russian market in 2014. The restructuring helped normalise the company’s operations and secured its future and the jobs it supports.
DTEK Energy, the largest thermal generation company in Ukraine, manages generation and coal mining for DTEK, DTEK Renewable Energy manages DTEK Group's renewable energy assets and is the largest green energy investor in Ukraine. Three wind power plants and three solar power plants with one gigawatt of solar and wind power are the largest in Ukraine, and two solar power plants are among the five largest solar power plants in Europe.
ACP has invested in DTEK Energy bonds since 2017.
Lemtrans, Ukraine's largest private rail operator specializes in freight transport and operates more than 20,000 gondola cars carrying over 52 million tons of cargo per year.
Lemtrans also owns maintenance and technical facilities. Lemtrans continues to invest in new gondola cars and repair of rolling stock, to date, investments amounted to over $500 million.
In September 2018, Argentem Creek Partners purchased leases related to Lemtrans from a bank that was winding down. This allowed Lemtrans to eliminate uncertainty surrounding its leasing arrangements. This investment has been fully realized.
In August 2014, when the Russian Federation invaded eastern Ukraine, MRIYA, one of the largest agricultural holdings in Ukraine defaulted on its bonds and loans after years of financial success and robust growth performance. The holding reported that it worked with a total land bank of 320,000 hectares in areas in Western Ukraine.
Following the default, significant mismanagement and misappropriation of funds were discovered, and the company's debt of over $1 billion was put up for sale at significant discounts. Argentem Creek Partners purchased debts from a variety of holders and led the restructuring and turnaround of this agribusiness.
Implementing the company's restructuring strategy over a four-year period starting in 2015, ACP worked closely with the company's new management to create a profitable and transparent agribusiness managed by Western standards. In 2019, Argentem Creek Partners realized its investment when the firm was sold to a strategic investor in the agricultural sector in one of the largest transactions in that sector in Ukraine to date.
This project was successful and attracted additional investments from large strategic investors when it was sold and also created numerous precedents for debt restructurings. This was one of the first times that external creditors took control of a Ukrainian firm through an offshore bankruptcy process and had their claims recognized onshore. As a result of these activities, ACP achieved high standards of transparency and quality of management in the company, which allowed the team to successfully restructure a debt of almost 1 billion US dollars and save 1,500 jobs in rural areas. This investment has been fully realized.