Sailed away from the shipyard: why Vitaly Yusufov sold German Nordic Yards

Sailed away from the shipyard: why Vitaly Yusufov sold German Nordic Yards

In early March one of the companies of the Malaysian Genting Group announced that it was buying the German shipyard Nordic Yards for €230,6 million Since 2009 by the owner of the shipyard called himself a Russian businessman Vitaly Yusufov, son of former presidential envoy for international energy cooperation Igor Yusufov. tried to understand how profitable was Yusufov ‘ for this investment.

Write 40, 200 in the mind

Vitaly Yusufov bought two shipyards in the German cities of Wismar and Rostock-warnemünde in 2009 at a public auction. The shipyard was in bankruptcy. The new owner paid €40.5 million Win at the auction was promoted in July 2009 talk by then-President Dmitry Medvedev and German Chancellor Angela Merkel, when the Russian President personally told about a promising young investor. Yusufov Jr. previously worked in structures “Gazprom”, including those engaged in the Nord Stream project, and Yusufov, Sr., before becoming a special representative of the President, had visited the Minister of energy and the Director of the reserve, he then served on the Board of Directors of “Gazprom”.

This is the part of history which is officially known and not contested. But the story of the German shipyards and Russian money started earlier, and there are indications that Yusupovy could spend at the shipyard more than €40.5 million In the Luxembourg report of the audit firm Sagnard & Associes, which was prepared in 2013 by order of the bankruptcy Trustee the state of the Russian Financial leasing company (FLK).

From the report and related documents that the shipyards initially became interested in Deputy General Director of FLK Andrey Burlakov. And in 2008, the shipyard was acquired for €248,9 million Russian investors, whom were boatmen. Owner is a Luxembourg company FLC West, its CEO was boatmen. 74% FLC West owned by Templestowe with the British virgin Islands, 24% Cypriot Blackstead. Templestowe, likely, controlled the father and the son Yusufova, I guess the auditors. Such a conclusion they make, reading the internal correspondence FLC West. Blackstead and belonged to Burlakov. How were financed the purchase of the shipyards? According to auditors, about €200 million given Templestowe; the origin of the money in the report is not specified. Another €50 million provided Blackstead, and she took a loan of almost €40 million at FLC.

A former colleague at FLC Burlakova Anna Atkin in an interview with Forbes explained, everything is easier: boatmen wanted to buy the shipyard, but he lacked money, and he decided to make Igor Yusufov. Historically the partnership. However, it did not go well: because of the crisis, FLC defaulted on Burlakova criminal case has been filed, it has become an unwanted partner, between the owners of the shipyards had a conflict. For shipyards it ended in bankruptcy and a sale at auction. Burlakov was arrested, then released on bail and later, in 2011, shot.

If it were that, according to auditors, the shipyard could do Yusufov €240.5 million: around €200 million initially, and €40.5 million when buying at auction. However, Yusufov Jr. “first purchase” shipyards denied: “I bought these shipyards during the bankruptcy proceeding from the authorities of the Federal Republic of Germany. This was the only fact of my participation in all of history,” he told Vedomosti. A “statement” about the interest of his father in the murder Burlakov it in the same interview he called “baseless”.

240 write 100 in mind

After buying Vitaly Yusufov had hoped to upload the shipyard orders to Russian companies. “The strategy of Nordic Yards until 2014 clearly defined positioning in the Russian market” — he said “Kommersant”. As Vedomosti was told that he was going to cooperate with United construction Corporation (USC): the one could give a portion of their orders to the German partner in subcontracting. Another potential customer was “Gazprom”: he planned to build eight gas tankers of the ice class (to transport LNG along the Northern sea route), and the businessman is expected to participate in the execution of this order, negotiating the partnership with the “Northern shipyard” and the Vyborg shipbuilding plant.

But the plans so the plans remained.

The partnership with USC was not formed. In may 2013, immediately after the appointment of Vladimir Shmakov, the head of state, President Putin held a meeting on its development strategy. “I consider it unacceptable when orders for marine equipment, vessels of the civilian fleet without adequate grounds are placed in foreign shipyards. Priority should be given to domestic producers”, — said the head of state. “The idea that the orders of Russian companies should be placed on domestic shipyards, we heard from President Putin, said the current President of the USC Alexey Rakhmanov. — Possible cooperation should not be confined to production at our shipyards only buildings, but on foreign — ship equipment”. Need technology transfer, localization of production, but to negotiate with Nordic Yards for the score failed. “We are unable to find an optimal scheme of interaction in this regard”, says the top Manager.

However, one attempt was. In August 2013, Nordic Yards has signed a contract with the Baltic factory (enters in OSK), which the German company had to manufacture residential block add-on in the world the most powerful non-nuclear icebreaker “Viktor Chernomyrdin”, intended for the FSUE “Rosmorport”. But in the end the contract did not take place. As told “Kommersant” a source in the United shipbuilding Corporation, the devaluation of the ruble has made cooperation with European companies too expensive.

The construction of gas tankers for Gazprom is also engaged in other shipyards. In 2014 the group has commissioned two vessels to LNG carriers built at Korean STX Shipbuilding. In 2013 “Gazprom” has signed with Sovcomflot a Memorandum of understanding providing for the construction of the enterprises of the USC 13 more tankers. Sovcomflot, incidentally, is also a potential customer of Nordic Yards. But a source in the company said that the carrier never with the German company did not cooperate.

According to the public reporting of Nordic Yards, in 2011-2012 the company has worked with the symbolic profits, but in 2013 showed a loss of €40.7 million (see table). For the 2014-2015 reporting could not be found. In recent years Nordic Yards was a loss, said a source close to the company: the sum of the losses amounted to “tens of millions of euros per year”. According to him, the maintenance of the company Yusufov spent about €100 million If we add these €100 million to €240 million paid earlier, the recent sale of the asset to Malaysians for €230 million looks a bargain.

In Russia there is a shortage of shipyards, which will be addressed only in 2019, so theoretically Yusufov could count on orders, says the Director of development Agency PortNews Nadezhda Malysheva, Possibly to get orders, Yusufov lacked the right connections, she suggests: “He’s an investor, not a Builder”. And then devaluation and sanctions closed the subject.

Igor Yusufov declined to comment for this article; Vitaly Yusufov has not responded to the inquiry; a representative of Nordic Yards has not provided the requested data on the portfolio and the financial performance of the shipyards.