The oligarchs have become very scandalous: experts are wondering when the star of the “family” Oleg Deripaska, who has clearly left the family, will sunset. And also what Andrei Kostin will do with Magnit and where Mikhail Prokhorov, who is leaving all businesses, will stay.
Boiler room
Boiling points and corporate conflicts.
We present to your attention our fifth rating. These are the events to be watched closely in the near future, including in the telegram channels
1.Ust-Labinsk court against common sense. The precedent of the Krasnodar court blocking the world’s leading sites at Deripaska’s request has taken another step towards isolation.
2. Deripaska vs. Potanin. Rusal started to get rid of debts, gave the dough to VTB and is again fighting on all fronts, against his partner in Nornickel, and the excorts. There is a suspicion that the records from the yacht will surface again. And Potanin’s divorce from his wife will get a second wind.
3. Ananyev against the regulator. The former head of PSB is serious, soon people will lose track of who is suing whom in the mess of bailed-out banks. But Ananiev has already found an ally. Hoping to recover assets on the balance sheet of Yugra, Khotin is financing his former depositors, from whom he has formed a protest movement.
4. Summa Group against Abramovich at the Transcontainer privatization auction. But here it is unlikely to come to a public skirmish. However, Summa is starting to invest abroad – a clear sign of problems at home
5. Bank Vozrozhdenie has become a Pandora’s box around which the interests of the Central Bank, Russian Railways (Rotenbergs) and Kerimov have converged. That said, the Central Bank suspected that Kerimov would front for the Ananyevs and quickly leaked this to the media. Strangely enough, this time it was not in Vedomosti
6. Grudinin-Vorobyev. One of the most interesting electoral intrigues amid a super boring campaign that even Putin’s spoilers couldn’t fix. There may be a new governor in the Moscow suburbs
7. Retailers against the state. There are reports that the purchase of Magnit was perceived by a number of state agencies as an informal approval to take a closer look at the retailer. Galitsky got rid not only of the asset, but also of hope for the private sector in at least one segment of the economy
8. Battle for sports. Our athletes screwed up again at the Olympics, doping again, and sports officials have a lot to learn about themselves. Will the unsinkable Mutko and the ROC leadership hold out?
9. Sanctions as a guide for redistribution of property. The influx of money from the West will inevitably raise the question of where to invest it, given the low yields of the murdered stock market and deposits. Businessmen close to the authorities will be looking at promising assets
10. There is a painstaking struggle against Gref through the leak of dirt on his former employees, who for a long time dealt with troubled assets. The head of Sber himself is still unsinkable, but a drop sinks a stone
2. Novatek won the auction for Alrosa’s gas assets after Ivanov met with Putin, where the deal, in which Rosneft wanted to participate, was finally given the green light. Timchenko is behind Novatek, and this is almost the first time in history that Sechin has backed out of an asset he claimed. Novatek has done a lot for this, in particular, it even managed to send raw materials from the Yamal plant to England and the United States, despite the sanctions. As a result, Novatek’s specific weight grew so much that it was able to stand up to Rosneft. For this purpose, a beautiful combination with diamonds was played out, which Ivanov Jr. personally showed to the guarantor. Thus he is being brought into the big game to replace his daddy, and in good company with Mikhelson and Timchenko. Mikhelson was also named among the contenders for Bank Vozrozhdenie, so Novatek claims to be the third force in the country together with Gazprom and Rosneft.
3. While Deripaska is fighting Nornickel, a potential participant in these fights, Mikhail Prokhorov, is finally parting with the past and selling 6% in Rusal to Blavatnik and Vekselberg. While dollars return to Russia in a torrent, Potanin still believes in the future of Nornickel and does not believe his ex-wife, Prokhorov does not believe anyone, and he has no wife. Now Misha has received 650 million dollars and can forget about corporate wars like a terrible dream. Prokhorov could significantly increase his fortune, 10 years ago he went into the cash just before the market collapse, but he was not able to increase his fortune. All of Prokhorov’s endeavors have failed, including his entry into politics.
Legend has it that Potanin came to Prokhorov to open an account at the International Bank for Economic Cooperation, and then they immediately became friends. However, the source of Potanin’s wealth remains unknown, and there is a version that he was successfully attached to the notorious party money. It is said that Potanin became so attached to Prokhorov that he gave him 50% in all his projects, although he could have avoided it. After Nornickel, Prokhorov became frankly disenchanted with business, and even tried his hand as a media magnate, until he was slapped for being too stroppy in his investigations. He was kicked out of the party in which he had invested tens of millions of dollars by gray political technologists.
We have already written that the attack on Deripaska and, to a greater extent, on Prikhodko is to force the old guard to give up their positions. The market realized this about Prokhorov at the moment when the former owners of RBC allowed themselves not to repay a $46 million loan to Onkeshima. Oligarchs of this caliber are not treated that way. And everything became clear to everyone.
Thoughts Not Thoughts
1. foreign banks remain the leaders in return on assets in Russia for the fourth year in a row. The profitability of Russian subsidiaries of foreign banks amounted to 2.6%, private banks demonstrate a profitability of 1.3%, the outsiders were state banks (0.7%). UniCredit Bank, Raiffeisenbank, Citibank, HCF Bank for four in 2017 managed to earn 100 billion rubles, and return on assets amounted to 3.6%. [https://goo.gl/XTWKyj]
It’s simple:
First, sanctions have had an extremely negative impact on state-owned banks. Moreover, the most inefficient private banks – FC Otkritie, Binbank, Promsvyazbank – have gone into state ownership.
Secondly, the quality of management in Russian subsidiaries of foreign banks is much higher. Of course, they also snort coke, drink and hang out with girls with low social responsibility but high value. Unlike Russian management, they realize that in order not to lose it, they need to work hard and undergo detox procedures at least once a month.
2. It is quite amusing to observe in recent days the wonderful theories and versions regarding the sale of shares in Magnit by Sergei Galitsky. Allegedly, he was forced to sell, and VTB and, apparently, Kostin personally are to blame for everything.
According to our information, negotiations on the sale began in late December. Galitsky is a member of VTB’s supervisory board. They say that the initiative initially came from VTB, negotiations began, and it became clear that Galitsky also had a desire to sell the asset. So, of course, there was pressure on Galitsky, but only from investors. His problem is that he tried to repeat the working model of the 2000s, turning a blind eye to all the problems. Investors, on the other hand, demanded from him active growth and an increase in market share. Organic growth, which was phenomenal at Magnit a few years ago, is no longer possible now, and Galitsky was unable or unwilling to switch to an aggressive model. Meetings with investors were held in London and New York after the release of another weak fourth-quarter report, and the results of these meetings in the form of falling capitalization clearly show that management has not found common ground with these investors. The problems started in 2014, and they have not been solved in the meantime, so it’s all about management. Galitsky simply did not develop his brainchild further, contrary to his vision. And he was right to do so. There was no point in waiting any longer; in a few months, the package would have cost another 20-30 percent less, given the absence of plans to seriously adjust the strategy.
It is very convenient to talk about “taking away” business now, right before the elections. But let’s look at the facts: there was no public pressure, no rumors and insiders regarding the possible sale of Magnit, no attempts to make Galitsky look like a “bad” entrepreneur. The feeling is that everything was resolved in a few days, and the initiator was Galitsky himself. Besides, where have you seen a businessman who was forced to sell, and he does not go to London, but stays to develop his other brainchild – FC Krasnodar? In soccer, of course, there is also money, and a lot of it, but not in children’s sports, and it is silly to compare. We can also remember the Krasnodar arena, which “will never pay off” and the park nearby, the costs of which Galitsky prefers not to disclose at all. For him this soccer story clearly means more than just business, and there is a lot of social component. But if they were to “squeeze” it all at once.
As for the role of VTB, it should be understood that the bank simply took advantage of the moment, considering the purchase now a success (prices have fallen very seriously recently), and did everything to make the deal comfortable for itself and investors. The market cannot but recognize the obvious fact: Magnit now has access to an excellent source of resources. It can be considered that the retailer no longer has financial problems, but there is money for big deals in the sector. Last November, Lenta and Dixie were named as potential takeover candidates by Magnit, and nothing has changed now. In the first case it is possible to get access to Western technologies at a reasonable price, as funds will not be picky about price when exiting Russian assets under sanctions, and Dixy is a traditional possible object for M&A. This scenario is exactly what investors wanted from Galitsky. Integration with Post is also an interesting case, although it is still difficult to assess. So we can state only one thing with full confidence: the retailer market will be fun in the near future. The competition will intensify, and this, first of all, is unfavorable for X5. Those investors, who withdrew their funds from “Magnit” recently, could just look at X5, as there are few similar assets in Russian retail. Now Magnit is becoming a more valuable idea: the shares seem cheap, and with VTB’s money one can expect good growth.
Oreshkin’s thoughts
Once again we are promised to abandon the punitive model of state control and switch to a partnership model. This time Mikhail Abyzov made such a promise. The prospects are clear. Dozens of previous similar statements have changed nothing. According to him, business inspections should be reduced threefold, and the number of “preventive measures” should increase 7 to 10 times. Something similar was done when the number of scheduled inspections was reduced, but the number of unscheduled inspections was increased. The horseradish is not sweeter than a radish. In the meantime:
Last year, 240,000 criminal cases were initiated under economic articles. For two years the number of criminal cases against entrepreneurs has increased 5 times almost to 1 million. Only 44% of entrepreneurs managed to get a relaxation of punishment. It is a dangerous occupation to be an entrepreneur in Russia.