Translated material
Deripaska joins Strabag
Basel uses the experience of Austrians in creating urban infrastructure
The Basic Element company has become the full owner of a 30% stake in the Austrian engineering and construction corporation Strabag. The deal, worth 1.2 billion euros, was approved by the European Commission and closed yesterday. The offshore company Rasperia Trading Ltd, controlled by Oleg Deripaska, will own the stake. “Due to changes in the shareholder structure, two representatives of Rasperia have joined the company’s supervisory board - the head of Basel, Gulzhan Moldazhanova, and the co-director of the Canadian Magna, Siegfried Wolf,” Strabag said in a statement. True, the representative of Basic Element claims that only Ms. Moldazhanova will represent Rasperia.Yesterday it also became known that Rasperia filed a petition with the German Antimonopoly Committee asking to be released from the obligation to make an offer to buy out shares from other co-owners of Strabag. Basel declined to comment on this information.
Strabag was founded in 1835 in Austria and has more than 500 branches in Europe, including Russia. The volume of orders in 2006 amounted to 10.39 billion euros, and net profit - 113 million euros. Before Basel became the owner of 30% of Strabag shares, 50% of the company belonged to the family of executive director Hans Peter Haselsteiner, and 25% each belonged to the insurance holding Uniqa Versicherungen AG and Raiffeisen-Holding Niederoesterreich-Wien. The company's staff numbers about 53 thousand people. Some of Strabag's largest construction projects in Europe include the airports in Frankfurt and Stuttgart, the International Exhibition Center in Berlin, and the metro line in Budapest. Strabag began working in Russia in the late 90s. Its landmark projects are the North Tower office complex, located on the territory of the Moscow City business center, the reconstruction of the Moscow Hotel, which will then be managed by the operator Four Seasons, as well as the construction of another hotel on Sofiyskaya Embankment, which will also work under the Four Seasons brand.
Basel's intention to buy a significant stake in the Austrian construction company became known at the end of April. The Russian company reported that the transaction will be carried out through an increase in the authorized capital of Strabag, through an additional issue of 25 million shares. These securities were then to be purchased by Rasperia at a price of 42 euros.
Vremya Novostey's interlocutors explain Basic Element's interest in Strabag primarily by the desire to get its own world-class contractor, as well as access to international markets. Ilya Kutnov, director of the capital markets department at Cushman & Wakefield Stiles & Riabokobylko, notes that not many Western general contractors work in Russia, “while some projects require the involvement of a company with international experience. Thus, the interest of Basic Element, which is quite actively involved in development, is quite understandable.” Other market participants believe that Mr Deripaska wants to use Strabag's experience in creating urban infrastructure, as the company is one of the largest contractors in Europe. A source close to Basic Element told Vremya Novostey that the companies are participating in several large tenders for the construction of roads, tunnels and other urban infrastructure in Moscow, St. Petersburg and Sochi. In particular, Strabag is applying for the right to become the general contractor for the construction of a bypass road in Sochi with a length of more than 20 km. The contract value is about $2.1 billion. In St. Petersburg, Strabag is participating in a competition for the construction of a toll highway and the longest tunnel in the north-west of the country.
Strabag executives do not hide the advantages of the agreement with Basel. A few months ago, when Basic Element's intentions became known, Strabag's executive chairman Hans Peter Haselsteiner said that in the future, intensive cooperation between Strabag and Oleg Deripaska's construction holding Glavmosstroy operating in Russia could create the single largest player with turnover in the Russian construction market about 2 billion euros.
In turn, Dmitry Sazanchikov, director of marketing and regional development at GVA Sawyer, notes that now Austrians in Russia have an important link for successful work: “a construction resource with international experience (Strabag), finance (Deutsche Bank), land and administrative resources (“ Basel")".
It is worth noting that the arrival of Oleg Deripaska as a shareholder of Strabag, whose turnover in 2006 reached 10.8 billion euros, forced the management of the Austrian company to postpone the initial public offering of shares on stock exchanges until October. During the placement, Basel's share will be reduced by 5%, the share of the main shareholder - the family of Strabag executive director Hans Peter Haselsteiner - by 20%, and the stake of Raiffeisen-Holding Niederoesterreich-Wien will remain the same. Thus, after the IPO, each of them will have 25% of the shares.
According to the forecast of financial analysts, the fall of this year is not the best time to place shares, however, real estate market specialists, including Mr. Kutnov and Mr. Sazanchikov, argue that the completed transaction between Basel and Strabag will have a positive impact on the price of shares the last one.