Serviceman

Gennady Timchenko continues to purchase assets

The Volga Resources Sicav-SIF fund, created in 2007 in Luxembourg, the main beneficiary of which is businessman Gennady Timchenko, continues to pursue an aggressive investment line. Yesterday it was announced that the main player in the mergers and acquisitions market in the Russian oil and gas sector over the past year has acquired a blocking stake in the oil service company Geotech Holding. The company, created by the former head of Eurochem, Nikolai Levitsky, is the largest player in the seismic exploration market in Russia.

And although this segment of the business does not currently provide super-profitability, the administrative capabilities of the new shareholder can significantly increase the order portfolio. A similar situation occurred with NOVATEK, which, as Mr. Timchenko’s share increased, consistently received tangible advantages in the gas market, ranging from access to servicing new customers and ending with the inclusion of the Yamal LNG project in the list of government priorities for the near future.

Two years ago, Nikolai Levitsky sold 23% of the holding’s shares to investment funds during a private placement. The company's additional issue of $100 million was purchased by Farallon Capital Management, AIG Private Equity, Black River Asset Management, as well as the placement organizer JP Morgan. The holding's management retained 77% of the company's shares. The money received was used to purchase a large asset - 70% of the shares of Khantymansiyskgeofizika.

Vice President of Geotek Denis Cherednichenko told Vremya Novostey that this time “the placement of shares was not carried out for specific financing purposes.” The parties, citing the non-publicity of Geotech and the buyer, do not disclose the parameters of the transaction. It is known that Volga Resources received 25% through the purchase of shares from management, three foreign investment funds and through an additional issue. At the same time, the management, represented by the president and founder Nikolai Levitsky, retained a controlling stake. Black River Asset Management, affiliated with the American group of companies Cargill, left the shareholder. But in 2008 he acquired only 10% of the additional issue, that is, his share was about 2%. It is unknown how many shares Farallon Capital Management and Pinebridge Russia Century Partners (formerly AIG) ended up with.

Nevertheless, it can be assumed that it was decided to carry out an additional issue in favor of the new shareholder due to the fact that Geotech Holding had certain debt problems. Mr. Cherednichenko refused to comment on issues regarding debt, noting that the company’s financial position is stable. According to preliminary data, the company's revenue in 2009 amounted to about $400 million (27% less than before the crisis).

Most likely, the package cost the buyer less than the investment funds. In 2008, the placement took place at the peak of the stock market and the boom in oil prices. In addition, according to unofficial data, Volga Resources is not particularly generous when purchasing assets, but at the same time resells them very successfully. A particularly striking example in this regard is the 74.9% stake in Yamal LNG. A controlling stake in a company with extremely uncertain production prospects was sold to NOVATEK for $650 million, and an option was issued to the same NOVATEK for the remaining shares of the Luxembourg fund for $450 million. At the same time, the costs of acquiring the asset from Gazprombank structures hardly reached although would be 200 million dollars.

Volga Resources has no plans to increase its stake in Geoteka yet. But the fund, according to Vremya Novostei sources, is preparing a number of more transactions on the Russian market in the near future. Today he owns 18% of NOVATEK, 80% of Stroytransgaz and 24% of Yamal-LNG. In addition, oil trader Gunvor, whose main co-owner is Gennady Timchenko, owns 30% in Lundin Petroleum (engaged in exploration of several blocks in the Caspian Sea).

Alexey GRIVACHS