Billions Domodedovo: how business Dmitry Mason

Billions Domodedovo: how business Dmitry Mason

July 1, the court exempted the owner of Domodedovo airport Dmitry Mason from house arrest, which lasted more than four months. Mason remains a defendant in a criminal case on the terrorist attack in Domodedovo in 2011, but the business Ombudsman Boris Titov on Friday has expressed confidence that the case will soon be closed, calling it “sucked from the finger”. A source close to Mason all these months , claimed that the reason for the arrest was the attempt to force Mason to leave the business, in which he came back in the mid-1990s.

The carrier of the goods

“It was not a passenger terminal, and the barn,” recalls fellow Serbian construction company Cyvas, Srdjan Milosavljevic. In Domodedovo the Serb for the first time was in 1998, when Cyvas has awarded a contract for the reconstruction of the terminal. In the reconstruction by the time it needed desperately: the airport was built in 1962, with the expectation the flights from Central Asia and Siberia, but the money for the development of the state are not enough.

The main condition of the customer was not to close the terminal for repairs, says Milosavljevic: airport every day was to serve the passengers. The contract concluded with Cyvas, OOO “East Line”, which by that time owned Domodedovo in equal shares with the government, but actually managed the airport.

The company “East Line” appeared in the mid-1990s. She drove through Domodedovo consumer goods from China to Moscow, renting a cargo aircraft from the state Domodedovsky production Association of civil aviation (DPO HA). It is a state-owned enterprise after restructuring managed all the assets of the airport: airfield, accompanying infrastructure, passenger terminal and aircraft. Started this business two young people from Ekaterinburg, — the employee of the Working center for economic reforms under the government of Bakov and the student of philosophical faculty of Moscow state University Dmitry Mason. According to Bakova, he called Mason in this business, considering his acumen and thoroughness. Soon the Tanks decided to pursue a career in politics, and the Mason began to develop independently, creating the “East Line”.

A former top Manager of “East line” recalls how were the relations with the staff of the DPO HA: “We had mobile phones and computers, and they wrote books. Once we bought the copier, so workers of state-owned enterprises put him in a separate room and closed with a key. They did not have — in contrast to the ambitious “illinova”.

That the sole owner of “East line”, — Mason, will be known only in 2011, when Domodedovo will prepare for the placement on the stock exchange. In the early 1990s as a Bricklayer your business does not advertise, but to build a new cargo terminal proposed Director of the DPO HECTARES Leonid Sergeyev. In 2015, in an interview with Forbes Mason will tell you that the warehouse complex in the Domodedovo then commanded not airport managers, and porters, which, in turn, commanded the bandits. Sergeyev offer young businessman agreed: DPO HA and “East Line” is equally invested in the new cargo complex, the first phase of which was commissioned in 1995.

The owner of the airport

The construction of a warehouse complex plans of a Mason is not limited. In 1996, the “East Line” was offered on Wednesday to reconstruct (in fact rebuilt) the passenger terminal. The costs of a private company was willing to take, but instead wanted a share in the future the airport terminal. Sergeyev agreed. Legally, the scheme of cooperation is as follows: company Mason together with the state enterprise registered JSC “Domodedovo-2”, where DPO HA made all the movable and immovable property of the airport complex, and the “East Line” — 22 million roubles Partners owned new company on a parity basis for the reconstruction of the building hired Serbian Cyvas.

In 1997 Prime Minister Viktor Chernomyrdin ordered to divide DPO HECTARES on three legal entities. Co-owner of the passenger terminal was, OAO Aeroservis Domodedovo”. In the second year of existence, the company was bankrupt at the suit of the utility provider. In the course of bankruptcy of the structure of “East line” bought the state’s stake in the terminal building, and the General Director of “Aeroservis Domodedovo” Sergey Rudakov went to work for Mason. In the beginning of the airport property was transferred to the Cypriot Hacienda Investments Ltd.

Simultaneously with gaining control of the passenger terminal company associated with East-Lyne has completed another important deal was signed with GUP administration of the Domodedovo airport (another successor DPO HA) the lease of the airfield and surrounding area at 3.2 million rubles. per year for 75 years.

In a few years, the state tried to challenge the transactions in court. In 2003, “Administration of Domodedovo airport” was asked to accept the lease agreement null and void, and the Federal arbitration court of the Moscow region agreed to do it. Head of while the court Lyudmila Maikova explains that the unitary enterprise was created to manage the property, not renting it, so the contract was illegal. The government also beginning in 2005 tried to challenge the transfer of the passenger terminal structures of “East line”, arguing that consent to the transaction gave Mosoblast, who had no authority.

The proceedings in both cases have reached the Supreme arbitration court (YOU). Rosimushchestvo YOU refused, and an argument about the rent, most likely interfered with senior officials. When the structure of “East line” in 2005, lost the court, the Governor of Moscow region, Boris Gromov, sent a letter to President Vladimir Putin. The Governor of the Moscow region warned the President that the actions of officials can lead to the closure of the airport. Putin put the resolution “Laws must be followed, but the state’s actions should not lead to the destruction of a successful business.”

After that representatives of the Mason presented the court with a previously unknown Charter “Administration of Domodedovo airport”, which stated that the company created to manage the airfield by lease. In the end the case ended with the settlement agreement: the lease rate was raised from 3.2 million to 92 million rubles and it could be reviewed every five years. Subsequently, the chamber came to the conclusion that because of the unreasonably low rents the state between 1998 and 2005, earned more than 600 million rubles.

The trial was not stopped the airlines which have started to move from Sheremetyevo and Vnukovo in the updated terminal Domodedovo became the most modern in Moscow airports (in an interview with “Vedomosti” in 2004, Mason argued that the “East Line” invested in the reconstruction of $300 million). In 2001, Domodedovo moved second by volume of international transportations “Transaero”, in 2002, the first domestic “Siberia”, and in 2003 — the first Western company to British Airways, followed by other foreign carriers.

From 2000 to 2005, passenger traffic at Domodedovo has grown by more than fourfold, reaching 14 million people. Sheremetyevo passenger traffic over the same period grew by only 12%. As a result, in the midst of litigation in 2005, Domodedovo airport became the largest airport of Russia, surpassing longtime leader Sheremetyevo — almost 2 million people. The first place among Moscow Domodedovo airport will hold another ten years.

Other officials

To privatize the airport and to develop it is impossible without high-ranking patrons. Gromov not only wrote a letter to Putin in protection Domodedovo, but generously shared with the regional airport land. In autumn 2003, the official has signed a decree, which increased the reserved area around the airport with 2.8 thousand hectares to 64 hectares and was said to Mason, “Vedomosti”, this would be enough for the construction of eight new runways. Part of the land was purchased by East Lyne”, part received a special status, according to which the use of the territory was necessary to coordinate with regional officials and Domodedovo.

A big role in the success of Domodedovo played starting in 2002, high-speed trains from Paveletsky railway station of Moscow to the airport. It was through the efforts of the Director of the airport Sergey Rudakov, well communicate with the Minister of Railways Gennady Fadeev, says the source , who was working at the airport.

Defended the interests of the Mason and Herman Gref, when he was Minister of economic development and trade. For example, tells a familiar Gref, he was strongly against plans to take away the “East line” passenger terminal and to terminate the lease of the airfield. The conduct of the state could become a signal for the revision of the entire privatization and would be bad for the investment climate, says the source . The representative of the savings Bank could not answer a question , asking to speak directly to Gref. Ask a question to the President of Sberbank personally told was not possible.

Two friends Mason say that he is difficult to communicate with authorities. “Dmitry is very logical, maloemotsionalny and alien to the bureaucracy,” explains one of them. Another recalls a meeting in the government three or four years ago, on which the Mason was in hard form to Express a complaint to the head of Rosaviatsia Alexander Neradko. “We all were taken aback by this accident. He’s not just criticised, and shouted and accused Neradko in inefficiency. After the incident, Mason at meeting in the government almost did not call,” — says the source .

But to build relationships with the right people it turns out the Chairman of the Supervisory Board Domodedovo, businessman Valery Kogan, appeared in the “East Line” in 2000. Former Manager Domodedovo says that Kogan is a great negotiator and gets along well with officials. His arrival at the airport coincided with the initiation of the FSB against members of the “East line” of the criminal case on smuggling. The court in this case was completed only in 2008, the time of the four episodes in just one more. All five defendants received suspended sentences.

Strong relationships

Kogan, a native of Dushanbe, in the 1990s, was engaged in the supply of products to Russia from former Soviet republics. Mason told me that he had met with Kogan accident: “It was a long time ago, when we started the business. First there was skepticism, and then we settled in to each other, and formed lasting relationships.”

The participants of the aviation market and experts long believed that Kogan may be a co-owner of the airport. This was facilitated by the ownership structure of the Cypriot DME ltd (formerly known as FML Limited), which owns all the assets of Domodedovo. Nominal holders of its shares was made by Jane Peters (64%) and Sean Cairns (36%) with the Isle of man. It has been suggested that Peters represents the interests Kogan and Cairns — Mason, Mason explained himself in an interview with Forbes. But it’s a wrong guess, he said: according to Mason, he is the sole owner of the airport.

To negotiate with officials at Domodedovo does not always work. For example, Mason and Cohen was unable to convince authorities of the need to construct a third runway. Now the airport there are two of them, one last passed major repairs in 1981. Back in March 2011 led while Putin’s government has instructed the Ministry of transport to consider allocating funds from the Federal budget for the construction of a new runway. The Agency decided to build it 300 meters from the action, and the last to turn in the taxiway, leaving the airport with two runways. Minister Maxim Sokolov explained that the need to meet the stipulated in the Treasury of 14 billion rubles.


Forbes magazine estimates the state of a Bricklayer in the $2.9 billion Net profit (RAS) of Domodedovo in 2013 (the latest published accounts) amounted to 9.4 billion rubles From 2008 to 2014, revenue of the airport has increased by half, exceeding 40 billion rubles EBITDA over 2014 — about 17 billion rubles., told Mason. Thus, the profitability of the business exceeds 40%. About the same as it was in years past. A similar indicator — about 42% — and its main competitor, visa. Co-owner of Sheremetyevo Alexander Ponomarenko is a standard margin for airports in developed countries and in emerging markets, the profitability reaches 56%. Domodedovo and Sheremetyevo have something to strive for, said the businessman.

Financial performance Domodedovo grew amid the boom of air transportation. Acting managing Director of “Domodedovo commercial services” Alexey Raevsky talks about the correlation between economy and air transportation: a 1% increase in GDP leads to an increase in passenger traffic of air transport it by 1.8%. However, in Russia for many years, the ratio was abnormally high — tenfold and more. Market subsidized Western banks explains Rajewski: they gave cheap loans to air carriers, those aircraft procuring and reduced fares to attract new passengers. In 2015 after ruble devaluation, sanctions and recession, some companies were the owners of a Park excessive and unaffordable debt. For example, “Transaero”, for which Domodedovo was basic aeroportom. The bankruptcy of the airline has hit the business of a Bricklayer. In 2015, Domodedovo has lost its status as the largest airport of Russia, Sheremetyevo losing. Passenger traffic at Domodedovo airport dropped last year by 2.5 million people. Approximately half of the estimated Rajewski, connected with the bankruptcy of the country.

Airport business consists of three segments: takeoff and landing aircraft, service aircraft and passengers, the commercial exploitation of the terminals. Most revenue comes from the statements of Domodedovo in 2013 (latest published data), brings service aircraft, including refueling. And the most profitable — commercial segment, in addition to leasing space to rent for cafes and shops can include advertising, hotels and Parking lots.

In 2016 the income of the Moscow airports is expected to grow. Since the end of February of the current year the Federal Antimonopoly service (FTS absorbed) abolished tariff regulation in the Moscow airports. The consequence was the increase in the cost of services. For example, in Domodedovo fee for the use of the terminal building (it is paid by airlines for each of the last passengers) increased on domestic routes from 45.5 to 65 rubles, and in Moscow — from 113 to 123. (domestic flights are carried out only through the terminal D).

An important part of the business Domodedovo — refueling aircraft, in 2013 it accounted for more than 11 billion rubles, or about a quarter of revenue. Rajewski says that in 2015, the petroleum sector accounted for about 20% of the turnover.

Refueling infrastructure remaining from the Soviet era, “East Line” in the 1990s was reconstructed with state DPO HA. Then this asset like many others, has completely passed into the possession of the Mason companies. This is a unique situation for Russia. Seven of the ten largest airports in the country by the owners of the refueling complexes (TZK) are large oil companies — “Rosneft”, “Gazprom Neft” and LUKOIL. “The expansion of the oil companies to airports began in the second half of zero, — says Director of business development Agency Analyst commodity markets” Mikhail Turukalov. — Growing prices for kerosene, the FAS demanded to monopolize the market, in the end, many owners of airports had to sell TZK. Prices, however, rise is not stopped”.

The owner TZK, as a rule, prefers a particular fuel seller. At Sheremetyevo and Vnukovo, where TZK belong “Rosneft” and is the main supplier of jet fuel (see infographic), and Domodedovo accounts for only 5%. Selling fuel to airlines (it is called dressing “into the wing”) is a high-margin business. For example, reports “Rosneft” it is called the “premium segment”. According to the calculations Turukalov, the difference between the price at the point of entry to the airport and the cost of kerosene for the airline reaches 30-40%.

The accused

24 Jan 2011 the terrorist Magomed Yevloyev came to the Domodedovo airport from the Parking garage, bypassing the metal detector. Police, as seen on the record with surveillance cameras, this time enthusiastically talked with the employee of the airport. An hour later, the bomber blew himself up, killing 37 and wounding 117 people.

A criminal case against managers of the airport and police officers of the Investigative Committee of Russia (TFR) opened the next day, accusing them of violating transport safety. In March 2012, the case was closed two months later resumed, finally closing in August 2015. But by the time the investigators brought against representatives of Domodedovo separate case, accusing them of providing unsafe services. The defendants — three managers of the airport (including two former) and owner Dmitry Mason, all are under house arrest.

TFR claims boil down to the fact that in Domodedovo almost didn’t finish outside the terminal building, through the metal detector was asked to pass only 2% of visitors. According to investigators, thus the airport skimped on the security staff. Prosecutors have demanded four times to close the deal, pointing to a lack of communication between the rendering of unsafe services and terrorist attack: the death of people caused by the action of a suicide bomber, not airport staff, believe in the GP. Lawyers managers emphasize that while the law did not require a hundred percent inspection of incoming, in addition, responsible police, not security.

Surrounded by Mason claim that the criminal case instituted on the fact of a terrorist attack, are attempts to force Mason to sell the airport. Does not exclude pressure on Domodedovo and a senior official of the government. In 2011, while he investigated a criminal case on the fact of a terrorist attack, the media reported about the interest in the business of a Bricklayer-side a number of buyers.

Forbes wrote that after the cancellation of the IPO of Domodedovo in 2011, Mason had discussed the sale of the asset from businessman Alexander Ponomarenko. In conversation with Ponomarenko confirmed that he considered this deal “together with partners”. According to Forbes, it was about the owner of the group “Sum” Ziyavudin Magomedov.

Ponomarenko said that since I was not interested in Domodedovo. Along with Arkady Rotenberg and Alexander Skorobogatko are they now develop another airport — business in control of Moscow holding, which owns 68.4% of shares in Sheremetyevo. In Summa, declined to comment. A source close the group says that its members really participated in the talks, and even gained access to “virtual data room” Domodedovo (there is stored detailed information about the asset), but considered the history of the airport rather as an interesting business case study.

“Kommersant” was called among possible buyers of Domodedovo group “Renova” Viktor Vekselberg (owned by the holding “Airports of regions”), included in the “Alfa group investment company A1 (in the early 2000-ies planned to become an investor of construction of a third terminal in Sheremetyevo) and the company “Vnukovo-invest” representing interests of private shareholders of Vnukovo — Vladimir Skoch, the father of the Deputy of the state Duma and former co-owner of “metalloinvest” Andrey Skoch) and Vitaly Vantsev.

Vantsev has refused to comment on his possible interest in Domodedovo. The General Director of “Airports of regions Evgeny Chudnovsky in 2012 in an interview with “Kommersant” on the question of interest in Domodedovo, said: “Renova” has expressed interest in the Moscow aviation hub. The interest persists even now. However, this interest remains purely theoretical, as to date, and incomprehensible plans of the owners of assets. In a press-service of A1 declined to comment.

Another contender for the purchase of shares in Domodedovo was the investor Igor Yusufov, part 2011 the Board of Directors of “Gazprom”. In an interview with “Vedomosti” he said that he negotiated with Valery Kogan to acquire a 25% stake in the airport for $1 billion Now Yusufov did not answer the question , is he interested in now this asset.

Uncooperative seller

Closer to the purchase of Domodedovo, according to sources , was the Alliance of Rosneft and operator of regional airports “Novaport, controlled by the holding company AEON of businessman Romana Trotsenko. Negotiations between them and Mason went to the final stage in the fall of 2013. In case of success of the transaction “Rosneft” would be TZK, and “Novaport” airport terminals and other infrastructure. Trotsenko at the time held the position of Advisor to the President of “Rosneft” Igor Sechin and head of the foreign division of the company, Rosneft Overseas. Before this businessman was President of the United shipbuilding Corporation (USC), the Board of Directors of which was headed by Sechin.

There are also materials describing one of the final versions of the scheme of the transaction. According to these materials, the total price of the airport and TZK was supposed to be $4.8 billion Rosneft was ready to provide $985 million, AEON — at least $500 million, the remaining $3,315 billion was supposed to take in the savings Bank (including $3,115 billion credit and up to $200 million mezzanine financing). Rosneft and AEON was specifically for the transaction the establishment of the joint venture and to contribute, and SP — to the Sberbank loan to buy Domodedovo. Then SP would transfer the shares of the airport and TZK as collateral on the loan.

The materials reported that “Rosneft” will receive the right of ownership of TZK three years after the transaction, that is, by the time the asset will be removed from the pledge. In addition, Rosneft would become the exclusive supplier of fuel to the airport we have to pay SP royalties for $50 million a year for seven years. Therefore, the cost oil company in Domodedovo would exceed $1.3 billion.

According to a source familiar with the position of a Mason, the deal fell through when the seller asked AEON to submit a Deposit of $100 million, “the Representatives of Trotsenko the first time, negotiated the purchase of Domodedovo in the fall of 2011, then almost all of 2013. Perhaps the environment Mason, tired of the meetings and conversations, we decided to verify the seriousness of the buyer,” suggests the source . According to another source on the airport market, the last time Mason made it a condition of the transaction, the redemption and the land around the airport that buyers need not be.

Two weeks ago, at the St. Petersburg economic forum Trotsenko said the Agency RNS, that maintains interest in buying Domodedovo, but while Mason is under arrest, the negotiations will not lead. “It’s just unethical, and many would consider that we take this difficult for the Mason situation. I think Mason is a very worthy man, and very strong. He won’t sell until it’s all over, whatever the offer. […] If all ends well, what we sincerely wish them, then we’ll sit down, breathe, drink a Cup of tea and start talking, if he would be interested,” — said Trotsenko RNS. “If someone thinks that these circumstances will cause it to change its decision, it is a profound mistake. This is one of the strongest people I’ve seen in my life,” said the owner of AEON.

In “Rosneft”, Domodedovo, Sberbank CIB (the representatives of the offices of Sberbank participated in the negotiations) and AEON declined to comment on the events of 2013. A source close to Domodedovo, and representatives of the press service, argued that no proposals for the sale of the airport under house arrest in Mason have not yet received.