A superyacht linked to a sanctioned Russian steel billionaire and worth an estimated $75 million ($108 million) has been auctioned off in Gibraltar, in what is believed to be the first such sale since Russia invaded Ukraine. in February.
- The ship has capacity for 12 people in six cabins and has a swimming pool, spa, 3D cinema and equipment for water sports.
- The 58-year-old billionaire owner of the ship was sanctioned by Britain and the European Union shortly after the Russian invasion of Ukraine.
- A Gibraltar government source said the money would likely be frozen rather than handed over to someone other than the Russian oligarch.
The Axiom was seized by Gibraltar authorities in March after US bank JP Morgan said its suspected owner, Dmitry Pumpyansky, had defaulted on a $20 million loan.
The 72.5-meter ship was auctioned by the Gibraltar Admiralty Court through a system of closed bids to be submitted electronically before noon on Tuesday, a court spokesman said.
The court added that 63 bids had been submitted for consideration and the selection process was expected to take 10-14 days.
The buyer and the sale price were to be published after the sale was completed.
There was an “unexpected late surge in potential buyers” around the world for the ship, Nigel Hollyer, Admiralty broker at the Gibraltar High Court who led the auction, told The Guardian newspaper last week.
The ship has capacity for 12 people in six cabins and has a swimming pool, spa, 3D cinema and equipment for water sports.
According to court documents reviewed by Reuters, JP Morgan lent €20.5 million to Pyrene Investments, which is listed in the British Virgin Islands and was owned by Furdberg Holding.
Furdberg’s owner was Pumpyansky, who acted as guarantor of the loan.
Newspapers said Pyrene Investments breached the terms of the loan after Pumpyansky transferred his shares in Furdberg to a third party on March 4 and was later sanctioned, blocking payment of the loan.
The 58-year-old, who has an estimated fortune of $2 billion according to Forbes magazine, was sanctioned by Britain and the European Union shortly after the Ukraine invasion.
Until March, Pumpyansky was the owner and chairman of steel pipe maker OAO TMK, a supplier to the Russian energy company Gazprom.
The company said it had since withdrawn from the firm.
The Axiom is the first seized luxury yacht to come up for auction since the West imposed sanctions on the powerful Russians following its invasion of Ukraine in February.
Sources close to the process told Reuters that JP Morgan would only claim the 20.5 million euros owed and that any other proceeds from the sale would be left to the courts to disburse.
Dozens of yachts and houses linked to Russian oligarchs have been seized by world governments since the invasion.
British and US authorities have said they would seek to send the proceeds of the assets sold to Ukraine.
A Gibraltar government source said the money would likely be frozen rather than handed over to someone other than the oligarch.
A JP Morgan spokesman declined to comment.
James Jaffa, a solicitor for the British firm Jaffa & Co, which specializes in yachts and which represented the Axiom before it was seized, said the ship was likely to sell for “well below” 20 million euros.
After the auction, he said, the ship’s broker, crew salaries, shipyard and maintenance will have to be paid before the bank.
However, a successful sale would be a “benchmark” for other banks seeking to recoup losses by auctioning off the repossessed property and other assets of the sanctioned oligarchs.
“Axiom will be a watershed moment for assets that have bank financing against them because all the other banks will realize that the asset can be sold and they can get some or all of their money back,” he said.
However, he stressed that assets with no financial claims against them that were seized by governments just because of the sanctions would be harder to sell.