Irish liquidators put planes belonging to Kremlin-owned GTLK firms up for sale

The liquidators of two Irish aircraft and ship leasing companies owned by the Russian government have begun to put up for sale planes they have managed to track down and seize, as western creditors seek to recover $1.75 billion (€1.63bn) that they are owed.

Joint liquidators Damien Murran and Julian Moroney of Teneo Restructuring Ireland have put an initial six planes owned by the two firms, GTLK Europe and GTLK Europe Capital, up for sale in three separate transactions being managed by IBA, the international aviation constancy group.

The first sale — of two Boeing 737-800 aircraft, in the Middle East and leased to a low-cost carrier — was launched at the start of this month. This has been followed by the launch of sales of an Airbus A321-211 which was leased formerly to a Russian airline, but based in Europe, and, last week, three A319-111 planes also based in Europe.

The High Court ordered in May last year that the two Russian state-owned aircraft and shipping leasing firms be put into liquidation, on foot of an application by four creditors who claimed they were owed more than $175 million by them.

The firms were hard hit by sanctions imposed on Russian entities following the invasion of Ukraine in 2022.

GTLK Europe and GTLK Europe Capital, units of JSC STLC, Russia’s largest leasing business, had 70 aircraft and 19 sea vessels on their balance sheet, with total assets of $4.5 billion as of the end of 2020, making their liquidation the biggest in the history of the State.

The planes and ships were out to 21 lessees in 13 countries. The liquidators have so far managed to track down 30 aircraft, in countries including Spain, the US, Qatar and China. They have also located three Arctic cruise ships.

To recover the value of planes and vessels remaining in Russia, the liquidators have also joined a case in London against insurers that had contracts covering $2.4 billion in assets held by the GTLK firms.

“The focus since the appointment of the joint liquidators by the High Court last year has been to work with regulators, both in Ireland and internationally, to establish a path forward for the liquidation within the sanctions regime,” said the liquidators.

GTLK challenged the appointment of the liquidators last year, arguing that the Moscow parent should be registered as the legal owners of the European units’ assets under agreements governed by Russian law. The High Court rejected this last December, though that decision is under appeal.

Dublin’s position as one of the world’s largest hubs for aircraft lessors has turned the High Court into a hive of litigation stemming from Russian sanctions.

Earlier this month, the court began hearing what is expected to be a months-long trial involving claims by aviation leasing firms over insurers’ alleged refusal to provide indemnity after billions of euros worth of aircraft were detained in Russia following its invasion of Ukraine.

The world’s second and third largest lessors, SMBC and Avolon, along with BOC Aviation, CDB Aviation, NAC Aviation and Hermes, are the six plaintiff groups bringing proceedings against dozens of insurers and reinsurers such as Lloyds, Chubb, AIG and Fidelis.