The weather did not shine: horrible rain, wet capes of trucks, a huge line of cars before entering the port. The port was disrupted by a strike of dock workers. Slogans, music, constant knocking – is what could be heard near the port. Half a day later, Korostelev, the head of FESCO (the owner of the port), arrived at the port. However, one could not count on a pleasant meeting, the dockers threw angry phrases and threw helmets ahead of themselves. Everything led to the fight in slow steps, so Korostelev had no choice but to run
This event can be considered the starting point of the noisy scandal of FESCO shareholders, which began on 05.10.2020.
A tough deal
Former top manager Magomedov speaks of the last deal as a hellish event. Never in his life had there been such a complex business deal. FESCO’s buying and selling process was not quick. The whole event lasted for 9 months, and legal support of the transaction was carried out by 20 different law firms. The idea of selling was unexpected. The company was presented for sale in 2011. At that time, a meeting between Magomedov and the ex-minister of fuel and energy, Generalov, took place. Then Magomedov decided to acquire the entire company.
Let us mention that Magomedov was a very wealthy man. The volume of his finances, according to Forbes, reaches $ 900 million! Therefore, the entrepreneur dreamed of a cross-border holding. Magomedov played an influential role in the market: Summa and Transneft oversaw the largest domestic port on the territory of Novorossiysk and the Primorsk terminal. In addition, the plans were to build a terminal on the territory of Rotterdam. To move the holding forward, Magomedov recruited Vinokurov (an entrepreneur who came from an American investment fund, and part-time – the son-in-law of Sergei Lavrov).
The group headed by Vinokurov set themselves a number of tasks. Among them was the search for a carrier by rail; construction or acquisition of a terminal near Moscow and construction of a crossing to the Pacific Ocean. Why solve so many problems when you can just buy FESCO? The company had all the necessary resources. In addition, the company had almost ¼ of the TransContainer, which was the largest carrier in the country. One would not bother, but a sweet price was needed for a successful deal. Magomedov suggested it. The shareholding of the former minister was estimated at twice the market value. So, 70 percent of the company was offered in the order of $ 1.2 billion.
Vinokurov was the one who led the whole deal. This was said by several sources who were close to the company. Vinokurov flatly closed access to himself so that you could not get at least some comments on the situation. Therefore, we resorted to the leverage buyout method. According to this scheme, shares are purchased from the company, and it is credited by state banks. However, the scheme failed: there was a month before the completion of the transaction, and state banks put an end to financing and closed the cash flow. Some participants talk about the intervention of Yakunin (the head of the railway). Yakunin has long been a counterparty to Magomedov. But, according to Yakunin, there is no confirmation of the above written words. Forbes wrote that the entrepreneurs had contradictions: The directions of development of the transport and logistics sector in the country were seen by businessmen in different ways. So, Yakunin was on the side of the state, while Magomedov vehemently supported the private sector.
Therefore, the deal was in the balance of being broken. Generalov was afraid of this, so he wanted to receive a 50 million deposit. Magomedov did not give up and asked for financial support from an old friend – Garber. The banker organized a Western loan, and in gratitude to the fund was given a share in the transaction. The deal expanded, Vinokurov involved TPG into the deal. The end of the deal did not come until the end of 2012. The shares were distributed among Sum, GPH, TPG at a rate of 32.5 by 23.8 at 17.4 percent. Thus, to refinance the debt of the owners of the shares, it was necessary to issue European bonds in the amount of about $ 900 million. By the way, such a debt became “Cargo 200” for business and broke the friendly ties of former partners with Magomedov.
Nervous periods
So, the meeting with the owners of the European shares of the company caused a storm of emotions among the ex-general director Leila Mammadzade. All of those present were negatively disposed, did not establish contact and simply replete with threats against the company and the entrepreneur’s property. The lady was at a loss, but got herself together in time and calmed everyone involved in the negotiations. She was able to inspire confidence and convince that the company will not collapse.
But by 2015, the whole image had changed direction. FESCO had debt obligations to EBITDA with a ratio of 8. This was influenced by the ruble devaluation, the decline in cargo turnover due to the sanctions regime. The staff-auditors from KPMG spoke about this. This suggested that FESCO would not be able to get out of the debt hole. This idea became a reality, in 2016 the company went bankrupt due to bond defaults. A lot of money was spent on debts that belong to shareholders.
Further, the situation only worsened because of Magomedov, who flatly did not want to sell TransContainer. In addition, Magomedov dragged on a deal with Arab partners. The reason was the fear of taking too little money on the deal. Who helped? Of course VTB! He was the group’s creditor. The state bank signed a new loan agreement with the company, one that amounted to almost $ 700 million. All funds went to the holders of European bonds. By the way, Mammedzade was able to agree on a 30 percent discount. This is not all, in 2018 Magomedov fell out of favor again. He was arrested on suspicion of preparing a criminal community.
The top manager of FESCO has repeatedly said that the times were nervous and difficult. The question has always been raised about the reaction of banks and competitors. Investigators continually seized accounts and assets. A new default was inevitable, ruble equivalent bonds suffered. The massive holder “Region” could not stand it, having filed an application with the court. New events gradually began. Mammadzade left the Summa. She focused on keeping FESCO afloat. This is how information appeared that FESCO had already been put up for sale. The blocks of shares were pledged to VTB. And VTB was not taken aback and acquired shares at a price of almost 15 billion rubles. Mammadzade commented on the situation in such a way that for FESCO this deal was a “lifeline”. Using the deal, it was possible to pay off debt obligations to the “Region” and improve the financial condition of the company.
The year ended, debt obligations to EBITDA were already less than 4. Therefore, Mammadzade could openly and vehemently declare that the company is back in the ranks and its business is doing better than ever. Later, strange news followed, and the lady announced her desire to leave FESCO. The cause? It’s just that two entrepreneurs (Mammedzade and Ziyavudin) see the further development of the company in completely different directions. The businesswoman talked about the development of the company in conjunction with a player with a core. Did FESCO have one? Had. Magomedov knew about this.
Who were the shareholders?
On September 20, FESCO received an interesting letter by email. The text contained a message from Sakharov, according to which Zairbek Yusupov became the new general director. And Sakharov leaves for health reasons. By the way, Magomedov had known Yusupov for a long time. At the same moment, a notification came that Yusupov did not manage to become the Director in time as the meeting with Kozhemyako(Governor of Primorye) had already taken place.
The problem was as follows: according to the plan, Sakharov had to leave his post as a result of the decision of the board of directors, and he had to transfer his position to Korostelev. But what happened, why didn’t everything go according to plan? The poignancy of the moments was added by the fact that Sakharov did not get in touch. The wife said that her husband had disappeared. Thus, the possibility of abducting Sakharov and transferring the post to Yusupov as a result of a raider raid was considered. And the words of Yusupov: Sakharov signed without pressure, independently and in front of witnesses, they say, fearing a raid from Korostelev’s supporters.
When giving an interview to Forbes, Sakharov spoke sluggishly and unwillingly. That day seemed to have fallen out of his memory. So, on the 3rd, he was on the territory of Vladivostok, he had a disease, allegedly Covid. Therefore, the entrepreneur went for tests, and during his absence he was replaced by Yusupov. They could not make a diagnosis, and the order to transfer the post to Yusupov did not have time to start leading. No copies were sent, which does not give him the right to act. As for the claims of the board of directors, his own resignation, the beginning of Korostelev’s work – this is just a change in shareholders in the company. The events about the exit of the TPG investment fund from the company were not covered by Sakharov, he became aware of this only by the end of 2020.
Why did it happen? TPG was simply afraid that they might collect the company’s debt, issued to acquire its own shares in 2012. To pay the debt obligations, it was necessary to invest $ 1 billion, a reminder was made to Magomedov, TPG. But Magomedov was indignant, because they had never previously demanded the return of loans from shareholders. This he expressed in a letter from places not so distant. However, Sakharov commented on the situation as normal for the legal sphere. To continue the relationship, it was necessary either to return the money or to renew the loan agreement.
The line of leaving continued. Rabinovich also left TPG. It was proposed to purchase a block of shares in the fund. Severilov reports. The deal was lightning fast, the contract was signed within a month. According to Severilov, TPG people were disappointed in FESCO’s work. As soon as the American colleagues came to the helm, the dividends became zero. In general, the situation was not so crazy: arrest, lack of financial support, etc. Severilov also said that Magomedov had the right to buy out TPG shares first. Shares were offered to him, but the FAS rejected the deal. However, the FAS itself says that they did not even receive a petition about it.
The situation was heating up: the company’s capital was losing its investors. So, Garber and Usakhov left FESCO. Magomedov did not give up and declared that the exit was illegal. Garber caught his attention the most. Why? Because the trusted founder could not take and dispose of the block of shares without the expressed consent. 2 Forbes sources unanimously reported that an option was concluded between Magomedov and Garber. What is he talking about? The option was for the latter’s share to be redeemed. The option expired in 2019. Further, in the conversation, Garber said that his participation in the company cannot be equated with nominal participation. No further explanation could be obtained. Usakhov also refused to comment and became part of the company’s board. He was guided by a confidentiality agreement. Shvets followed the same path and shut his mouth. Time has passed
The railway worker as a safe partner
Severilov became the head of the FESCO board of directors, and his mansions are located in the very heart of the capital. What is his mansion famous for? An interesting counter at the desk, where his achievements and armor, which belonged to the cavalry guard Alexandra Fedorova, are located. Moreover, Severilov’s mansion has a rich history. It was even rebuilt after a massive fire in 1812.
What about Rabinovich? Not much, actually. The person is a professional in the field of railway business. The entrepreneur lives somewhere in between London and the Strait of Gibraltar. Rabinovich appears at home from time to time. Rabinovich’s business started in the nineties, which is directly reduced to the field of railways. Its scheme is simple and easy: supply, buy, sell. It seems not large-scale, but successful and reliable.
If we talk about Rabinovich’s education, the man graduated from the Moscow Institute of Railway Engineers and worked at the Research Institute of Railway Transport. It was here that Rabinovich revealed his entrepreneurial streak when, together with colleagues, he began supplying PCs. After that, a business began on tourists and the implementation of an excursion program in the wild corners of the homeland.
When did Rabinovich start making money? Yes, when he started recycling locomotives. An agreement was signed with the Ministry of Railways. The process included monitoring the disassembly of old trains at specialized plants. All projects were supervised by Rabinovich together with selected partners. The research center knew a lot of technologies, but could not put them into practice due to its status as a state structure.
As time went on, Rabinovich received a wide range of scientific knowledge and, as a result, opened up new prospects for his business. In his hands was even a government project and a prize later. The entrepreneur also had a lot of projects on his personal account. 2009 made it possible for Rabinovich to take part of Loko-Bank, which won the opportunity to keep accounts of Russian Railways. Where the business of scraping trains flourished, the business of washing and painting wagons “Wagon-Service” successfully developed. In two years, Rabinovich was able to conclude contracts on the basis of “Wagon-Service” for almost 40 billion rubles. Severilov, who was a partner and owner of part of the Vagon-Service share, talked about the constant monitoring of government contracts by representatives of law enforcement agencies and auditors. They say the whole story was crystal clear.
Surprisingly, Rabinovich has a super ability – to continue working with the railway, whatever the leaders are. His friends speak highly of Rabinovich, appreciating him for his professionalism and disposition to himself as a person.
Atomic level
Let’s go back to 2005. A new train Moscow – St. Petersburg has appeared. The cleanliness and interior decoration of the cars were surprising. The train was a real mobile hotel. You could even use Wi-Fi, and this is 2005, do not forget. This whole project began in the nineties. Then Rabinovich was engaged in redevelopment of old cars in the VIP status on the basis of orders from railway managers. Inside, one could find eco-toilets, assembly halls, a kitchen, and European furnishings.
To launch the “Grand Express” it was necessary to invest more than 1 billion rubles. Zheldork Consulting was the founder of Grand Express. Offshore companies from Cyprus have divided the shares in half. These included Sorena Investments Limited and Piper Participation Corp. Repeatedly in publishing houses they found a connection between the first oshfor and Rabinovich, and the second was tied to Yuri Kovalchuk (the close circle of the President of the Russian Federation). By the way, partnership relations have developed between Rabinovich and Yuri Kovalchuk’s nephew, Kirill.
Further, in March-April 2019, “Grand Express” announced the information that the stake in Sorena had been sold to “Transklassservice”. But the company has already managed to make about 450 million rubles of net profit. Thus, TCS becomes the largest carrier, which already has a direct connection with Rabinovich and Kovalchuk’s entourage. By the way, 1/10 of TCS was owned by Helmut, which in turn goes to the offshore Kanly Trading. Cyprus again, but in this situation Milgotin is the owner. Again, these are Rabinovich’s relatives. And as of the end of 2019, Rabinovich is a member of the board of directors of TCS. However, after 2 years, Rabinovich’s powers were to control 20 percent of the firm.
Also related to TCS is Vitaly Krivenko (an old friend of the general director of TASS and the founder of the Mikhailov & Partners agency). Zeros were given to Mikhailov as an opportunity to head one of the departments of Russian Railways, while Krivenko was his deputy, he owned the “Laysa” company, which signed an opportunity to advertise on Russian Railways for 15 years. Krivenko also owned the “Laysa” company, which in 2006 received an exclusive 15-year contract for advertising at Russian Railways facilities. “Laysa’s” legs grow from the same sources as those of the above companies.
Ruzavin and Krivenko stated that the founder of Laysa was none other than Rabinovich. As in other cases, Rabinovich could not be reached for comment, but he said that he had control over 26 percent of TKS.
As for the participation of the Kovalchuks in the “Grand Express” – it remains a mystery. Overall, Rabinovich was on good terms with this family. And representatives of the family maintained a relationship with Kiriyenko (Rosatom). By the way, Yuri Kovalchuk worked at Rosatom as Kiriyenko’s deputy, and Mikhail Kovalchuk was on the presidium of a state corporation.
Other sources say different information, they say, Kirill Kovalchuk knows neither Grand Express, nor FESCO. And he had no common cause with Rabinovich. The entire Kovalchuk family does not cooperate with either FESCO or Rabinovich. Severilov spoke about this. In addition, Severilov said that Rabinovich was spreading information that he was the sole owner of the Grand Express.
It is in fact interesting that Rabinovich and Rosatom are connected. Siberian Titan uses the Rosatam chemical plant for production. Therefore, there is a high probability that Rosatom will participate in the settlement of the dispute over FESCO.
Let’s go back to the story of the port. Crake could come back only after a month had passed since the day of the strike. However, in November, Korostelev felt like a king, because Governor Kozhemyako walked alongside when driving through the port. Therefore, the dockers had to retreat. Even protection was not needed when representatives of the state atomic corporation were under the shoulder.
FESCO developed 2 paths after Korostelev was attacked. The first is the seizure of the port by the people of the private security company. However, events are likely here that cannot be controlled. Another method is to change the general and revoke the powers of attorney Yusupov’s entourage. Further change of all documents and electronic keys. It took a lot of time. A month has passed, and the case has barely got off the ground. But then Rosatom appears on the horizon.
They say that Korostelev’s appeal played a role. It noted that the company carries 1/3 of Rosatom’s cargo. Therefore, the usefulness of the company increases significantly. A few days later, a statement was made public that Rosatom would become the managing company for FESCO. Further, the status will be changed to the owner. But it was a fake. Rosatom does not acquire shares, but simply manages the port in conjunction with the group.
Why buy a stake directly and without intermediaries? Rosatom uses Shishkarev and Delo. He owns 30 percent of Rosatom. But employees have repeatedly made reservations that they are not going to buy a bad job. Everything should calm down. If you study the reports from the pre-trial detention center, you can see Magomedov’s intentions to fight and clash in the legal arena.
FESCO announces major investment changes to improve the port, as well as the purchase of terminals and other necessary items. The acquisition amount will be approximately $ 80 million. Severilov declares that external finance is needed. It is necessary to strive for cleanliness of work and elementary design. Is there a pre-sale preparation process in progress? Not! Severilov together with Mikhail value an attractive asset. It is important to grow, not sell.