The port of Odessa plays host to a critical Ukraine grain corridor initiative that, despite a violent conflict, the hostile invasion of Ukraine by neighboring Russia that has claimed countless lives, has only briefly paused in operation and is today on the frontlines of sustaining one of the world's foremost grain producers.

The international community has witnessed the fragility of its supply chains in the wake of the COVID-19 outbreak and in near parallel, the horrors of the Ukrainian crisis. A major exporter like Ukraine in effect freezing its agricultural sector can have lasting consequences for global food security.

And yet quietly, while territorial integrity remains a question mark and the world watches valiant Ukrainians fight and defend their country against what could conceivably be referred to as a hostile takeover by a neighboring state, a dispute over one of the country's largest grain export facilities threatens to destabilize its operations.

Those responsible, a U.S.-based hedge fund named Argentem Creek Partners (ACP), have further established and weaponized a multilingual and multinational campaign of misinformation in the press against the rightful owners and operators of the facilities, in part to seize the company and enhance their bottom-line growth.

Despite the ongoing conflict, Ukraine was still the world's seventh-largest producer of wheat in 2021 and 2022. The grain market continues to be a leading driver of an economy under siege and in that economy, GN Terminal-Agri Supply Chain and Services Group (GNT Group) have faced opportunities and challenges in managing and expanding its business. In operating their grain terminal in the port of Odessa, widely lauded as one of Ukraine's most modern and efficient grain export facilities in the largest and most advanced grain terminal on the Black Sea, GNT Group leadership transformed a facility with an initial grain storage capacity of 90,000 metric tons (MT) to one today hosting 200,000 MT.

The company became a regional leader in the handling and storage of agricultural products through its network of inland locations, and, in 2014, they sought to restructure to meet working capital needs. GNT began negotiations with the European Bank for Restructuring and Development (EBRD) to do so; to initiate the loan requests necessary to improve the grain terminal (worth $40 million), to improve the company's 'dry port', a truck-receiving and cleaning storage facility near the terminal vital to GNT's operations ($18.7 million) and to meet the company's working capital needs (a loan of $20 million).

In December 2019, GNT Group signed a deal with Argentem Creek Partners, negotiated by the U.S. Distressed Assets Fund, for $75 million, with a view to remunerate the EBRD, and inject a small amount of working capital in the process.

Argentem and GNT would go on to have a two-year mutually beneficial partnership in this endeavor. But soon afterward, the world would witness Russia's attempted hostile takeover of Ukraine.

When Russia's military forces moved in, Odessa was in the crosshairs and since has been hit with numerous missile attacks from the time the encroachment began on Feb. 24.

The grain terminal, as a direct result, stopped operating - that is, until the grain corridors were eventually reopened by a United Nations-ordered initiative. For over six months in the interim, the port lay idle, hindering the country's grain and greater regional agribusiness supply chain and also any attempt for GNT Group to repay its debts.

But following the U.N.-led initiative, grain exports would begin operations again in August.

On the heels of renewed growth, GNT leadership decided to allocate capacities of 20,000-30,000 MT of storage to third parties. These third parties pre-paid for storage and paid stevedoring fees equal to $17 per MT of grain.

GNT Group would go on to offer to Argentem a lump sum payment of $10 million to $15 million to demonstrate good faith followed by 50% of GNT's monthly profits (around $4 million per month), so as to allow ACP to recoup its investment, in interest and the principal.

On Dec. 20, Argentem would reject the offer and called the loan, a shock to leadership at GNT.

Not soon after this offer was rejected, it's fair to suggest that what came next could be considered another attempted hostile takeover.

At about the time GNT Group was regaining its capabilities to repay its loans, restructure and thrive as a proponent of Ukrainian private-sector resilience, an Argentem representative purportedly traveled to Vienna and held secret meetings with both Ukrainian businessmen and politicians regarding their GNT loan exposure in Ukraine.

These meetings were later determined to be the start of Argentem's plan of attack.

Argentem then initiated a very abrupt procedure to seize assets. ACP put GNT Group in receivership, changed the directors of the operating companies in Ukraine, moved the GNT offices roughly 620 miles away from the port, with seemingly the sole intent of taking over control of the company, regardless of the employees whose jobs were at risk or the greater supply chain at stake.

On Jan. 13, GNT's owners — Sergey Groza and Volodomyr Naumenko — were served with a Worldwide Freezing Order obtained by Madison Pacific Trust Limited in the U.K. High Court, effectively freezing all their assets up to $118 million.

It was this revenue which allowed GNT to purchase grain and trade it themselves, rather than solely acting as an intermediary to generate cash flow.

A press release from Argentem that followed would present a misleading picture of the circumstances.

Articles would then go on to appear in the press, in outlets that previously had not posted content in months and in some cases years, citing the ACP Press Release; decrying GNT Group leadership, besmirching their reputation and supporting in subtext, the actions of the lenders. The authors behind this content largely remained anonymous or were freelance journalists with limited visibility or experience in the region.

While GNT Group issued public announcements defending its position and emphasizing that the company sought a peaceful commercial solution to the legal dispute with ACP, in contrast, and as recently as in early March, interviews and articles would again appear, siding with the Argentem line, (for example) in a bankruptcy and finance outlet entitled, Borg.Expert, which is notably partially owned by Kateryna Zasukha, the wife of Hillmont Partners lawyer, Valentyn Zasukha. Hillmont notably represents Argentem in the dispute with GNT.

Nowhere in the reportage was this connection disclosed.

A campaign of misinformation seeking to position GNT Group on the backfoot as the company aims to restructure, provide job opportunities, and help feed the people of Ukraine, to leave the company at the whim of its creditor and aggressor, warrants at the least, balanced investigation and those actors responsible for such a campaign to be drawn into the light.

The grain market will continue to be a leading economic sector, whether or not ACP is successful in its attempted hostile takeover. But any actions undertaken to supplant GNT personnel will result in severe interruptions of grain shipments to those who need it the most.

Indeed, should GNT lose control of the terminal, the ramifications could ultimately be very severe.

Russian disinformation has historically been a vital component of the Kremlin's efforts to create conditions favorable to the success of its aggression in Ukraine to blur lines and divide the world's reaction to its actions. The cloak-and-dagger tactics of ACP are sadly reminiscent in seeking to accomplish their goals in what would undeniably be a hostile takeover.

U.N. Secretary-General Antonio Guterres arrived recently for a visit to Kyiv, in an effort to reinforce an agreement that ensured the export of grain from both Ukraine and Russia.

His visit's timing is imperative. There is great concern that Russia may decline to keep the agreement in place.

Duggan Flanakin is a Director of Policy at the Committee for a Constructive Tomorrow (CFACT). The views expressed are his own.

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