American Oracle announces continued negotiations over debt buyout in Russia
The American IT company Oracle remains interested in resolving the debt dispute involving its Russian subsidiary, Oracle Computer Hardware, which has been undergoing bankruptcy proceedings since August 2023. A representative of Oracle told RBC that the company is open to dialogue based on its initial proposal to purchase creditors’ claims, which was made in autumn 2024.
In March 2022, Oracle suspended operations in Russia, halting technical support and the fulfilment of existing contracts. In August 2023, its Russian subsidiary was declared bankrupt following a claim by the IT company Croc. Bankruptcy proceedings were then initiated. Among the creditors are the IT company FORS – Development Centre, Marvel Distribution, Alfa-Bank, Sberbank, MegaFon, Jet Infosystems, and others. The total amount of their claims is RUB 1.4 billion. By mid-February 2025, RUB 96 million had been recovered into the bankruptcy estate.
In October of last year, Oracle sent a letter to Russian creditors proposing a settlement: to buy the debt of its Russian subsidiary under a cession agreement (assignment of claims) for no more than 60% of its nominal value. The deal required creditors to waive any further claims against the Russian legal entity.
However, no agreement has been reached with any creditor so far. The bankruptcy trustee in the Oracle Computer Hardware case, Yegor Nepomnyashchikh, told RBC that Oracle is “deliberately avoiding further negotiations and not responding to the comments to the agreement sent by the creditors”. According to him, Oracle’s legal stance is: “Either sign what has already been proposed, or there will be no negotiations at all.”
According to an RBC source involved in the process, the real reason behind Oracle’s position is the existence of sanctions-related restrictions on such deals. In Oracle’s October letter, it stated that “permission to repurchase part of the debt was obtained after several months of engagement with the regulator”, referring to the U.S. Office of Foreign Assets Control (OFAC). Without an OFAC licence, the American company could not engage with Russian creditors. Moreover, according to the issued licence, the terms of Oracle’s offer cannot be altered.
In 2021, the revenue of JSC Oracle Computer Hardware amounted to RUB 7.8 billion. The RUB 1.4 billion debt to creditors is primarily linked to advance payments received from customers for future services. “The services were not delivered, and the funds were not returned to the customers”, stated the notes to Oracle Computer Hardware’s 2022 financial statements.