"Capital Tour" is for sale

Financial club will help tourists

One of the largest tour operators in Russia, Capital Tour, which has stopped fulfilling its obligations to clients and partners since Wednesday, yesterday found a buyer for its stake. It became the International Financial Club (IFC) bank, controlled by Mikhail Prokhorov. However, the buyer has put forward a number of demands to the tour operator, which, in the best case, can be fulfilled by the beginning of December.

Let us remind you that Capital Tour instructed its partners to stop sending tourists abroad from November 17, expressing the hope that the disruption will last no more than two days. As the company reported yesterday, “2,400 Capital Tour tourists are abroad.” Today 302 people are due to return. “Problems that arise with the company’s clients are resolved by representatives of Capital Tour and consular services,” the tour operator’s message notes. President of Capital Tour Igor Beltyukov said yesterday that he hopes to soon unfreeze the company’s accounts: “Today the corresponding letters have been sent to the banks. As soon as the unlocking occurs, payment will be made immediately to remove any difficult moments. If we don’t technically make it today, then tomorrow.” This may mean that Capital Tour will continue to operate from November 20th.

The IFC published a statement yesterday that, as a result of negotiations with the shareholders of the Capital Tour group, an agreement was reached on investments of up to $15 million. This amount will pay for the additional issue of Capital Tour shares. As a result, “the bank, together with a pool of investors, will become the owner of more than a controlling stake in the group of companies,” the statement says. The transaction can be completed only if Capital Tour and the relevant government agencies fulfill a number of preconditions. IFC included in this list the development within ten calendar days of a detailed business plan for a group of companies for the short and medium term, reaching an agreement with creditor banks on a comprehensive and complete restructuring of all financial debt of the group, the absence of radical changes in the financial indicators of the group while negotiations are ongoing with creditor banks, the bank obtaining all necessary permits from government agencies and corporate approvals for the transaction. “With constructive work by all interested parties, the first tranche of financing can be provided as early as the first ten days of December,” the bank said.

According to information published in the open press and not refuted by Capital Tour, the total debt of the tour operator to various banks is estimated at 1.3 billion rubles. That is, receiving $15 million (approximately 450 million rubles) from the IFC does not solve the company’s financial problem. Moreover, it would be too early to say that the problems of Capital Tour clients, who in the coming days should go to foreign resorts or return home from there, have been resolved. The Russian Embassy in Thailand has already recommended that they independently overcome difficulties on the spot, that is, re-pay for the services of hotels and other host organizations to which Capital Tour did not transfer money, and demand compensation from the tour operator at home.

In a commentary, the Russian Foreign Ministry says that there are about 500 Russian tourists in Thailand who arrived via Capital Tour, of which about 430 people are in Pattaya, about 50 are on the island of Phuket, the rest are on the islands of Samui and Chang. The document notes that since “the company did not pay for the hotel rooms, the administration of the hotels where tourists live refuses them accommodation or, conversely, tries to create obstacles for Russians when leaving in an effort to compensate for the costs incurred.” “Unfortunately, negotiations with the owners and administration of Thai hotels where Russian tourists stay are extremely difficult. They refer to significant financial losses and insist on paying the debt for accommodation that arose through the fault of Capital Tour, the Foreign Ministry said in a commentary. “Taking this into account, the embassy is forced to recommend that our citizens pay for hotel accommodation themselves, in order to then make claims to Capital Tour and reimburse the costs with the help of insurance.”

Mr. Beltyukov and his wife Inna Beltyukova, who holds the post of General Director of Capital Tour, already have successful experience in selling their own travel business to a third-party investor. In 1992, they created the Inna Tour company, which by the end of the decade became one of the most prominent players in the domestic travel industry (in particular, Inna Tour was then the largest Aeroflot agent in terms of ticket sales). In 2000, the Beltyukovs sold 75% of the shares of the company to Gosinkor Holding. At the beginning of 2003, they resigned from the posts of president and general director of Inna Tour and sold the remaining 25% to Gosinkor. Rumors circulated around the market at that time that the holding took the company for the debts it had accrued to Guta Bank, the parent financial institution of Gosinkor Holding. However, they did not find public confirmation. The Beltyukovs officially explained their final departure from Inna Tour by saying that they disagreed with the investor in their views on the company’s development path. Inna Tour is still operating successfully in the market, although Gosinkor and Guta Bank went bankrupt in 2004.

Mikhail KUKUSHKIN