An assistant for Moscow
An investment company will help Moscow to sell the city’s stake in an enterprise
А1, the investment division of Alpha Group, will help Moscow to sell its stake in the Moscow Tyre Plant, which owns 7.4 hectares. А1 itself has already acquired 29% of the plant, become its creditor and is counting on an advantageous sale of its stake.
А1 has become the owner of 29.17% of the voting shares in Moscow Tyre Plant OJSC (MTP), Mikhail Khabarov, А1’s president, told Vedomosti. He refused to disclose either the contract sum or the name of the seller. A source close to MTP says that the stake was sold to Alpha by entities linked to Alexei Gurin, the former general director of Amtel-Vredestein and MTP, who is currently being investigated for corrupt practices at MTP. According to data from MTP’s report of 4Q of 2011, 66.6% of the voting shares are owned by Moscow’s Property Department, 12.94% by Vinnet R Ltd, and 12.17% by Ergot Limited, with no details in the accounts of the owner of the remaining 8.29%.
There is no production at MTP. It owns properties which are located at 11 Sharikopodshipnikovskaya Street, and the total area of the properties is 86 750.2 sq. m., and there are also three land plots on a leasehold basis with a total area of 7.4 ha. In March 2012 bankruptcy proceedings were initiated in relation to MTP.
In addition to the shares, А1 has consolidated the plant’s debts, said an official representative of the investment company. A source in the capital’s mayor’s office knows that MTP’s debts amount to $20 mln., but could not say who owns them. Vedomosti was unable to get confirmation of this from Vyacheslav Bashmakov, the bankruptcy manager.
Yesterday the special state unitary enterprise (SSUE) for sale of the City of Moscow’s property announced an auction for sale of the stake owned by the mayor’s office. The auction is for 4 696 408 ordinary registered shares, which comprises 66.6% of the company’s voting shares. The starting price for the stake is slightly more than 1.7 bln. roubles. А1 will be seeking buyers for MTP, Timur Zeldich, director of the SSUE, told Vedomosti. А1 itself has no long-term plans for MTP, and the investment company is only interested “in selling the assets to a strategic investor for a fair price,” Khabarov says.
“MTP’s land is of interest for redevelopment. Residential buildings could be built here, always provided that the City grants consent for such buildings, offices, or a multi-purpose centre. One hectare could support the building of 25 000 sq. m. or more of commercial real estate,” says Mikhail Goetz, managing director of Praedium Oncor International. He estimates the price of land on Sharikopodshipnikovskaya Street at $10 m. per hectare (i.e. at $74 m). Yulia Nikulicheva, from Jones Lang LaSalle, has doubts about the value of MTP’s land: “There is a huge industrial zone here. The most obvious use for this land would be the construction of housing or offices, but the authorities might not allow the building of flats here because of the degree of contamination, while offices are not popular in eastern Moscow.”
What is to be done
А1 is acting logically, according to Edward Rebgun, the court-appointed trustee: without a debt, shares in a bankrupt firm are worthless. In his opinion, А1’s next step should be to conclude a settlement agreement and transfer MTP to external management for financial restructuring, after which MTP shares “will have a radically different price.”