How Intermarium Discovered the Ideal Solution for the Client’s Business

Our client, an international company operating in the forestry sector in Ukraine and exporting products to the United Kingdom, has a significant market presence and faced major challenges related to corporate governance, debt obligations, and tax efficiency. The company required a comprehensive restructuring to strengthen its financial stability and optimize its corporate structure.

Key challenges included:

• Long-term debt obligations that needed strategic resolution within Ukraine’s currency regulations.
• Inefficient corporate governance that restricted decision-making flexibility.
• Tax burdens and administrative complexities stemming from an international ownership structure.

We were engaged to develop and implement a legal and financial restructuring strategy that complied with both Ukrainian and international regulations while supporting the client’s long-term business objectives.

Our Approach

Our solution combined debt restructuring through a debt-to-equity conversion and corporate governance optimization to enhance control and improve efficiency.

Debt-to-Equity Conversion

Due to strict currency restrictions in Ukraine, traditional debt repayment was not an option. Instead, we developed a debt-to-equity conversion mechanism, ensuring full compliance with financial and corporate regulations.

• Conducted a legal and regulatory analysis to properly structure the transaction within Ukraine’s foreign exchange framework.
• Implemented a capitalization strategy, allowing the company to convert its debt into charter capital, eliminating external liabilities, and strengthening financial stability.
• Ensured full compliance with National Bank of Ukraine (NBU) regulations, avoiding restrictions on early repayment of foreign loans.

Outcome

The company successfully eliminated its debt burden, strengthening its balance sheet and unlocking opportunities for further investment.

Corporate Restructuring & Ownership Optimization

To address governance issues, we implemented a corporate restructuring strategy that enhanced control over the company and simplified ownership distribution.

• Designed an optimized ownership structure, improving corporate governance efficiency and reducing the influence of passive shareholders.
• Developed tax-efficient solutions, minimizing excessive tax liabilities and increasing operational flexibility.
• Ensured compliance with international corporate standards, increasing the company’s investment attractiveness.

Outcome:

1. Strengthened corporate control and improved decision-making mechanisms.
2. Reduced tax burdens and eliminated excessive taxation risks.
3. Established a more efficient ownership structure, providing greater flexibility for future growth.

Results and Impact

1. Debt-to-equity conversion eliminated external liabilities, enhancing financial stability.
2. Restructured corporate governance, giving active shareholders more control and improving management efficiency.
3. Optimized tax exposure, reducing financial costs.
4. Ensured full compliance with Ukrainian and international regulations, minimizing legal and regulatory risks.

Why This Matters?

This case demonstrates how a well-structured legal and financial strategy can help businesses resolve complex debt issues, improve corporate governance, and enhance tax efficiency—creating the foundation for long-term growth and investment attractiveness.