“While the oil — base product”
— Where you plan to spend placing of “RussNeft”? You have already chosen organizers?
— Because RussNeft is a Russian oil company operating in the Russian market, it is logical to hold an IPO on the Moscow stock exchange, which gives access to a wide base of investors, including foreign. Our foreign partners also consider London as an alternative. But given the big attention to development of domestic financial markets and lack of interesting companies in them we consider optimal placement of it on the Moscow exchange. Placement planning to take place before the end of the year. Consultants are fundamentally selected, but we’re not ready to announce them. B & n Bank will act as lead Manager of the offering.
— State-owned banks is among the organizers?
— Of course.
And foreign banks?
— A foreign Bank may, will participate.
— Some placement parameters of “RussNeft” can sound?
— Specific parameters of the IPO are under development. A basic plan for placement of up to 25% of the shares, if we see a good demand — to 49%. Consider the placement as preference and voting shares. We look forward to a fair assessment given the good position of the company on the market and its recovery.
Already some signs of stabilisation in oil prices and the ruble exchange rate. Investors are well aware that business not all companies experiencing a decline.
I think that oil prices have already experienced the bottom. They can still fall down a bit, but oil is non-renewable stocks and on the interval to 25 years we will certainly live in the oil era. Revolutionary things in the energy sector will start in 15-20 years, then we gradually move on to a different era. But while the oil — base product that will be stable in price. Of course, if prices go back to $120-140 per barrel, the capitalization will be different, but until we move from current prices.
— Are there already agreements with potential buyers? You will have an anchor investor?
We are already seeing high interest from a strategic investor from the CIS, he is ready to go to the capital for $1 billion. unfortunately, I have no right to call names.
— How will the distribution of shares after the placement?
— IPO options are in development. Sure you can say that the majority shareholder will remain Mikhail Gutseriev and his family (see reference), also a co-owner will (a Swiss trader. —) Glencore.
Oil on three
“Now all the oil, coal and other industrial assets in Russia and abroad, construction, real estate and hotel business in particular, as well as all banks and financial companies of the group shareholders are BIN I and also my relatives Sait-Salam Gutseriev and Mikail Shishkhanov,” — said Mikhail Gutseriev in an interview in July 2015. In the oil business (RussNeft and other assets) Gutseriev owns 70%, and his brother Sait-Salam and nephew Shishkhanov — 15%, said the representative of “RussNeft”. Thus, the effective share of Gutseriev’s RussNeft should be about 37.8 per cent, Sait-Salam and Shishkhanov — 8.1%.
This will be the first company in our oil segment, which will be the reference, and then it will be attached to all other assets. The real goal of entering the market is to make the company transparent to investors. “RussNeft” — the only Russian oil companies of this scale, which is not yet capitalized. The company is on the stage of development that requires an external source of capital. All kinds of credit resources we’ve got. Shareholders intend to actively pursue further development of the company and to reduce its share, attracting new investors.
Last year we brought (leasing company. — ) Europlan on the stock exchange. It was quite a successful placement in a difficult market. For me personally it was a serious school undergo the procedure for the organization IPO. I understand how it works. So now we are confidently moving in this direction and all our oil segment is sure to be on the exchange.
— That is, on the stock exchange will not only “RussNeft”?
— RussNeft, “Neftis”, oil refineries, and it is based foreign assets about 17 million tons of production (only domestic assets is about 15 million t —) and about 10 million tons of refining per year. Now they are somewhat scattered, but in the end, all these assets should be consolidated on the basis of a transparent public company that in the future will provide a huge synergy. On the stock exchange the first release of “RussNeft” due to its reserves and better known to investors brand — both factors important to embed.
“In this market Gutseriev — the authority”
You first want to hold IPO of “RussNeft”, and then attach other assets?
— We see this as a possibility, through the SPO and additional accommodation.
— What is now the debt of RussNeft? Moody’s wrote in its April review that the company plans by year-end to reduce it by almost half — from $2.5 billion to $1.3 billion.
— RussNeft was the debt that is associated with Glencore, which was converted into shares. Now the debt to VTB — $1.3 billion, it is a comfortable duty for a company of this magnitude. In order for the company was the most attractive for investors, we needed to reduce its debt burden.
We took advantage of market instruments: SPV-company, which owns “Balerian holdings (through her Gutseriev and his family is in control of RussNeft. —), has issued bonds for 100 billion rubles In their placement took part “didzhital invest” and “Region invest”. This amount was reduced by the debt of RussNeft in front of VTB (to $1.3 billion) and other creditors. Service of these bonds will be funded by cash flow from “RussNeft”. When placed successfully, they can be converted into shares (the company will hold an additional issue and placing of shares on the stock exchange, will be able to repay these bonds. —). But in any case, the debt will be timely repaid.
— The Bank participated in the placement of these bonds?
— As organizer.
— At the market said that the “Region invest” then laid these bonds in the Bank.
— B & n Bank money was not involved in the placement of these bonds, it would not be allowed standard on related parties. Yes, we used the possibilities of funding within our financial institutions, including Binbank. But in the new locations we do not use Bin.
— Who are the main buyers of these bonds “didzhital invest” and “Region invest”?
Market. I will not enumerate.
— What is the debt of RussNeft to related companies now?
— $1 billion, taking into account bonds. We were transferred to RussNeft Azerbaijani assets to buy that we spent about $1 billion, we are Now considering the question of entering into the perimeter of RussNeft Kazakh assets. It will be an international company operating in the CIS countries. The final decision around the perimeter of the assets to be attached to “RussNeft”, will be made by the end of June.
Management of “RussNeft” as-that will change before the IPO?
— The bones are almost set, for the extraction team has already been formed, the financial unit will be strengthened by new corporate managers. Next the CEO called Michael Safarbekovich (Gutseriev. —).
— But he will remain Chairman of the Board of Directors?
— Of course. He is the main lead-Manager of all oil and gas products.
— Gutseriev said in April that “Neftis” earned on hedging transactions of approximately $700 million in 2015-2016. What part of this money went to repay debts of RussNeft?
— All earned on the hedge, went to pay off debt Neftisa. And the total debt of the two oil companies we have cut about $5 billion over the past few years. And this process will continue.
— In terms of what I think to attach “Neftis”, “Forteinvest” and other oil assets to RussNeft?
— After placing of “RussNeft”, which we planned in the fourth quarter, and the auditor’s report on the first half of 2017. I think that really is going to happen a year after the placing of “RussNeft”, if it will be successful.
— Privatization of “Bashneft” will not interfere with your IPO? Because its management was offered prior to the sale of a controlling stake strategy to place about 10% on the exchange.
Is different companies with different potential investors. “Bashneft” — strategic investors who come into the company and its management, and “RussNeft” among other things will be a lot of institutional and financial investors. Any IPO can be “failure”. If we have to move location, we move, nothing to worry about. Today Bashneft, tomorrow some other company will come out. The key question is whether the market will believe in the head and the main shareholder, that it will successfully develop the business, to make an honest living and share dividends. In this market Gutseriev — the authority and trust to your word just won.
— Solved what will be the dividend policy?
— Parameters are now discussed.
Business family Gutseriev and Mikail Shishkhanov
RussNeft
“RussNeft” oil company, created by Michael Gutseriev in 2002. The company is among the ten largest in Russia: according to Moody’s, in 2015, it produced 7.4 million tonnes of oil, or 1.4% of the total production in the country. Revenue in 2015 amounted to 109.5 billion rubles., EBITDA — RUB 24 billion. (company data).
Gutseriev and his family own 54% of RussNeft, a Swiss trader Glencore — 46%. Nephew Gutseriev, Mikhail Shishkhanov family in the oil business belongs to the 15%, that is, its effective stake in RussNeft to 8.1%.
The BIN group
BIN group (now renamed in “Description”) was founded in 1992. It includes financial assets (banks, pension funds, leasing companies) and construction companies. The largest Bank groups — Bank that is rated “Banks.<url> is a 15 th place by assets (736,5 billion rubles on may 1). Second — purchased last year Gutseriev and Shishkhanov MDM Bank (30-th place by assets, 330,2 billion rubles).
In 2014, the Bank took on the reorganization of several banks: first, Moscomprivatbank (“daughter” of Ukrainian Privat; later he was renamed “b & n Bank Credit cards”), and at the end of the year — five banks of the group “Growth” (Bank “Rost”, KB Kedr, SKA-Bank and Tveruniversalbank and Akkobank). Also in the banking group includes “b & n Bank Murmansk and Uralprivatbank.
Among financial assets the group also has five pension funds, leasing company “Europlan”, insurance company “Benztropine”.
The largest construction assets of the group company “Inteko” (the annual revenue is about 20 billion rubles.), “Mospromstroy” (17.2 billion rubles), “the Patriot” (9 billion rubles), “October estate (5.5 billion rubles) and “A101 development”.
“I am a supporter of strict centralization in business”
— Almost a year has passed since the conclusion of the agreement for the acquisition of control of MDM Bank. What there were skeletons in the closet? I do not regret that have gone on the transaction?
— Do not regret. Definitely had higher expectations for some assets. We see that in the current market worse feel dealers, companies involved in commercial real estate in the regions, and MDM extensive lending to these borrowers, which certainly affected the quality of loans. Other aspects are not significant. For example, the bankruptcy of individual companies-borrowers is not as fast as we hoped. But overall I think we managed to do a lot with the small team with which I came here. Now I’m actually working on two offices before lunch at MDM Bank, after — office of the Bank, which is located in the neighborhood.
— Don’t want to do the Central office of MDM? Here the building better views of the waterfront, you can here the major clients invited.
— With large clients and I also in expensive restaurants Dating.
— Was it worth it to wait to buy MDM Bank another year for the asset was more attractive price?
— I think we picked a pretty good time. Compared to other banks, which then sold, MDM is a good asset and could go into other hands. Of course, any purchases of financial assets in a falling market difficult. But if you predict not one or two years, and in 5-7 years, you realize that the situation is equalized. MDM Bank gives us huge synergies on regional coverage. If we talk about all the shopping, we do not regret about any, maybe, the payback period will be greater than expected, but I’m only 43 years old, desires and energy for many years a lot of work.
— First, you and Mikhail Gutseriev signed an agreement to acquire the former owner of MDM Bank Sergey Popov of 58.33% of the shares of MDM, and in the close of the transaction your share accounted for 84.38%, including due to the purchase of shares from minority shareholders. You redeem the shares from the minority shareholders, based on the same assessment that was with the purchase of a controlling stake? Or is it different?
— Evaluation of the Bank when the purchase of a controlling stake was lower. The majority shareholder — and he is the majority shareholder with good market receives a bonus when the bad — sells at a discount. This year we plan to increase its stake in MDM Bank almost to 100% in equity will be about 2% of the shares of minority shareholders who want to stay, which is about 5-6 thousand people.
Mikhail Shishkhanov
Photo: Oleg Yakovlev/
If to speak about all the group’s banks (except MDM, Binbank attach to four banks of group “Growth”. — ) then the total number of minorities will be about 30 thousand people. The main share of minority shareholders share of “Binbank Tver’ (formerly Tveruniversalbank. —) — about 24 thousand However at present the decision on the compulsory redemption of these shares: the share of the Bank exceeded 95%, therefore we had the opportunity. As a result, the combined Bank number of minority shareholders will be significantly less.
— When you plan to bring the Bank to the stock exchange?
In 2016 we plan to finish Association of banks, in 2017 — technological integration, in 2018, will be the preparation of the Bank for an IPO, and in 2019 — already exit.
— What is the most difficult in the integration of these two banks? How much will the rebranding?
— Already, the Bank and MDM Bank and a single control system, and a retail product line. The most costly thing is the integration of IT platforms. Now we decide what kind of balance — MDM Bank or the Bank — we take the basis. And already proceeding from this solution, we integrated IT platform.
I am a proponent of strict centralization in business, you need to go to the consolidated balance sheet. Since 2013, I was engaged in the transformation of our retail banking. To start this transformation, in 2013 I made more than 250 flights from Moscow, a year of “lived” on the plane. Now the key task is the transformation of the corporate and investment banking. United Bank is working under the brand of b & n, and it is not even discussed. We did a measurement on the retail sector. The Bank’s stronger brand in terms of recognition among citizens. The total cost of the rebranding we estimated at several hundred million rubles.
— You in the reorganization — several banks in the group “Growth”, bearing the same name, the Bank you took to sanitize personally. Hole in it from the time of rehabilitation has increased significantly, don’t plan to ask for an additional loan from the Central Bank on his improvement?
— The hole has not grown. According to the regulations of the Central Bank, the Bank is obliged to form reserves. If the assets grow, the reserves also increase. The reserves, of course, have a negative effect on equity in the financial statements of the Bank. However, this does not mean that the hole is growing. By the end of the rehabilitation of the Bank “Rost” will be released on positive capital and is attached to the Bin.
With the Bank “Rost” was difficult in the beginning. We took him to a reorganization in December 2014, and no one expected that the key rate will soar so dramatically, with the result that the liabilities of the Bank rose sharply, which has brought a loss of about 20 billion RUB. to Calculate all the time, when you go to the contest resolution is impossible. But to ask for additional loans at ACB, we will not.
— Why? Some ask and receive.
— We all have different approaches. We must not forget that we not only sanitize the Bank “Rost” and the whole group, consisting of five banks. The situation in these banks resembled total chaos. There were about 250 branches, 6 thousand employees, the management system is not centralised IT platform is not integrated. I understood the ideology of the former owners: they wanted by buying up small regional banks and their joining to “Growth” to build up a big Bank. But we changed the concept, since otherwise, the integration would drag on for years. We cleared the balance sheets of the four regional banks, transferring their bad assets to “Growth”. And immediately join these banks to the Bank. Technological integration is already complete, with only some legal details. And rehabilitation of the Bank “Rost” we continue to engage.
“The cleanup of the banking system is fine”
— Have a chance to finish the rehabilitation of the “Growth” earlier than 10 years, as approved remedial plan?
— No, not there before we’re finished. This year we will complete the accession of four banks, but “Growth” leave it to sanitize for 10 years, the balance of “Growth” will be positive in 2025, we will append it to the Bank. Integration processes are very complex — this is an incredible amount of work, nerves, financial expenses, but it’s very interesting, and doubly nice when at the finish you see positive result.
— Why are you personally engaged in the rehabilitation of the Bank “Rost”?
When I met with the rating agencies, they warned that they were concerned about the impact of indicators of “Growth” to the overall banking group. As a result, I asked CB to transfer the reorganization of the “Growth” from b & n for me, that is, to perform the deconsolidation. Now I, as individuals, have towards government responsibility for sanitation of Bank “Growth”.
— That goes for your oil assets?
Of course, once I have stock.
“And you will have to disclose in the prospectus for the IPO of “RussNeft”?
— Of course, I, as a banker, reveal these risks.
— New purchases on the financial market expect?
— We are considering various options. For example, right now our weak spot is the mortgage, and therefore we consider the purchase of a highly specialized Bank, that is in fact not the purchase scale and purchase competencies.
The history of acquisitions of pension funds we have frozen and waiting for the approved rules of the game. Now, we are working actively for the unification of all our pension funds, which we attach to the NPF Safmar (former Fund “Raiffeisen”. —).
— Pension funds will participate in the privatization?
— Now actively there are discussions and suggestions. If interested and we will be able to deliver value to customers, then we will participate. While the final proposals for options no.
— Merger “Benztropine” and VSK was cash? What is the amount?
— The deal was cash. Obligations between the parties prevents us from disclosing the amount of the transaction. As far as I know, part of Sergey Tsikalyuk (shareholder of FAC. —) had planned to direct on repayment of the loan to Sberbank, but that was not the determining factor for the deal.
“Benztropine” fully merged into FAC and will work under their brand. Us insurance company need because it’s good food factory, besides the partnership of a large insurance company with the banking channel is by far the most promising direction of development. But, to personally supervise the management of the company, I would need another life. The first time I saw the owner, who is as deep as I immersed in the development of the company. In my case, it banking, it is insurance.
— Insurance company you will also be prepared for placing on the stock exchange?
— Yes, discussed.
Mikhail Shishkhanov
Photo: Oleg Yakovlev/
— Many bankers undertake to estimate how many banks will remain after two or three years, when the regulator will clean up the market. Is there such a rating from you?
It is exact countless the unit, how many banks will remain — will define the market itself. It can be 200-300 banks, and maybe 500. For us, the cleansing of the banking system is good, because goes unhealthy competition. A lot of banks that earned a shady business, simulated a real banking business. —) and dumping prices. For example, take the story of Master-Bank. I don’t understand what can live in a Bank in which all cash transactions were free. Any banking product has to be paid. I think in the next two or three years will form the core of the banking system, which will be the future of the banking system.
— What banks are earning?
— Key earnings now — cost-cutting (reduction of expenses. —). But this too must be done carefully, otherwise, start anorexia, and this is an irreversible process. You need to seek a middle ground, and continued success will bring the economies of scale of business and smart investment in technology.
Mikail Shishkhanov
Born in 1972 in Grozny. In 1995 he graduated with honors from the magistracy of the faculty of Economics and law at the University of friendship of peoples. Patrice Lumumba, and in 2000 — the Financial Academy. Started working in b & n in 1994 in the position of the head of Department on the organization of inter-Bank relations and Bank’s representatives in the regions.
From January 1996 to July 2015 worked as the Chairman of the Board of the Bank, July 15, 2015 went to work in MDM Bank for the post of CEO, but remained Chairman of the Board of Directors of the Bank.
Forbes magazine estimates his fortune at $1.6 billion, this corresponds to a 46-th place in the list of the richest Russians.
“Not to be confused with the suburbs and the New Moscow”
— I wonder if “Inteko” now to participate in the project of construction of “Moscow state University of the valley”? Will you be in this project an investor or co-investor?
Company “Inteko” originally, before I bought it, mastered the territory. Probably best from the point of view of the economy we are there to stay. But while it is not clear what format will be the construction, who will be the management company. Of course, if there is a competition, we will participate in it. But certainly, “Inteko” no right of first refusal, is the market history.
— The project of construction of the parliamentary center in Moscow have been frozen?
— We in this process were as consultants. But the theme must work for the government and then to submit it to the presidential level. And only then it will be competition that will decide who will be able to build. If competition shows up, the circle of people willing to be very modest, because not many players in the market have the appropriate competencies, building capacity and financial resources.
— You will participate?
— Look at the conditions. As a Bank, we fight for each client, as a developer for each project. But the conditions should be a market of interest to us.
— This year you did not have any transaction for the purchase of warehouse premises, although last year you closed a few deals. Why?
— It will be interesting proposals, we will buy.
A year ago, a group BIN bought from Vadim Moshkovich, the company “augur estate” and “A101 development”. In what stage are the projects in the New Moscow? Are there any problems with obtaining debt financing for these large projects?
— We have in these projects support the partner Bank — Rosselkhozbank, and we are very pleased to cooperate with him. We are engaged in the implementation of the “Spanish quarters”, build on those permits that were approved prior to our purchase. Already 70% built Russia’s largest school by pupils 1775. By the end of the year, I think, will complete its construction. We are also working actively on the project Clever City between Kiev and Kaluga highway. On site in addition to housing will be built smart Ecocenter, where in the future will move to staff the back offices of all of our financial companies. We have a unique opportunity to greatly reduce costs after the move. And then in 3-5 years when the property market goes up, previously achieved savings will be a big competitive advantage. Therefore, we are now actively working to create jobs, primarily for their own groups.
— In February, the Moscow government has submitted to the Moscow authorities their objections to the development plan of New Moscow is threatened by freezing the largest projects.
— Absolutely no problems. First, do not confuse the Moscow region and New Moscow. Indeed, in February in Balashikha and the Queen imposed a moratorium on construction of new residential buildings, but there were built a lot of housing with no social infrastructure and jobs. It is logical that the authorities went to such drastic measures.
As for the New Moscow and there announced a lot of projects, but since the beginning of this year, yet none of them brought to market. With respect to the development of our land Bank in the framework of the “A101 development” we are in constant dialogue with the government of Moscow. We are in the framework of the General plan can build on their sites in the area Kommunarka more than 5 million square metres of social facilities and commercial property. Don’t forget about Clever city, which we expect to build in Kommunarka conditions for the emergence of new jobs. All this will lead to the emergence of modern and comfortable urban environment, which hardly anyone wants to ban. On the contrary, the authorities in Moscow and I think the suburbs is just the sort of environment and want to see in their territories.
— What are your predictions on real estate prices when they start to grow?
— While the prerequisites of the sharp rise of prices there. The volume of supply on the market of mass housing in the Moscow region is at a historic high. Solvent demand of the population is very low. And in the affordable segment, demand is mainly determined by capacity to pay. The building materials, land, connection to the network is expensive. Therefore, in this segment the price increase there may be only minor, depending on the stage of readiness of objects.
In the luxury segment the situation is reversed, the volume of supply for last year was reduced by approximately 10%. The supply shortage may cause price growth in this segment. As well as race rates. According to our data, as soon as the rate goes up the demand for luxury housing is increased because the buyers in this segment tend to keep their savings in foreign currency.
