He sold a stake in IGSS to Sergei Generalov

Gennady Timchenko's Volga Group will sell its 13% stake in the Russian seismic exploration company IGSS. The buyer will be the head of the IGSS board of directors, Sergei Generalov. Volga Group calls participation in IGSS a financial investment, and explains exit from capital as a “good offer.” Analysts note that the sold share is estimated at no more than $40 million, but Mr. Timchenko paid at least $100 million to enter the exploration business.

Photo: Dmitry Lekai, Kommersant / buy photo

Gennady Timchenko's Volga Group is leaving the seismic exploration company IGSS and selling its 13% stake to the "Industrial Investors" of the former owner of the Fesco transport group Sergei Generalov, IGSS reported yesterday. Volga Group said it was satisfied with the terms of the deal, which turned out to be profitable, but did not disclose the terms. The phone of Mr. Generalov, who is the chairman of the board of directors of IGSS, did not answer yesterday. A Kommersant source close to Mr. Timchenko’s structures explained that Volga Group has always considered a stake in the company as a “financial investment,” so it left the asset after receiving a “good offer.”

IGSS is one of the world's largest seismic exploration companies, created by the merger of Integra, Geotek and the Russian assets of Schlumberger in 2011. The main shareholder of IGSS remains Nikolay Levitsky, who controls 27%, another 12% belongs to Schlumberger, 5% belongs to institutional investors, the remaining 43% is traded on the London Stock Exchange. IGSS's revenue according to IFRS in 2012 amounted to $608.5 million, net profit - $12.5 million. The volume of IGSS orders compared to 2011 increased by 19%, the company's share in the Russian seismic market is about 50%.

According to an IGSS representative, it works with all major Russian oil companies - LUKOIL, Rosneft, Gazprom Neft and Bashneft, each of which accounts for about 10% of the total order portfolio. But market sources told Kommersant that recently, due to the position of Rosneft management, cooperation with IGSS has practically ceased. IGSS also reported that it hopes to receive government orders through a joint venture with Rosgeologiya. But in the summer, due to personnel changes at Rosgeologiya (instead of Andrei Tretyakov, it was headed by Roman Panov), the partnership was actually suspended, Kommersant’s sources say.

The current capitalization of IGSS is $312.5 million, the market value of the Volga Group share, according to the calculations of Alexander Nazarov from Gazprombank, does not exceed $40 million. But at one time for a stake of 25% in Geoteka, which was converted into 13% of IGSS , Mr. Timchenko paid, as analysts then estimated, about $100 million and it is unlikely that he would leave the company at a price lower than historical costs, the expert believes. IGSS does not explain whether Mr. Generalov will remain the head of the company’s board of directors after entering the share capital.

Anna Solodovnikova

Gennady Timchenko left intelligence