A1 and Alfa-Bank Invest $ 200 Million in Russian Companies
A1 and Alfa Bank have reached an agreement on the joint investment activities worth US$200 million. The capital will be used for investments in Russian assets demonstrating growth potential. Based on the target criteria, the investment portfolio should include approximately 10-15 projects. The total value of target assets may exceed the stated capital due to debt financing as well as investments of third parties.
‘The combination of the experience and capabilities of Alfa-Bank and A1 will enable the creation of a highly relevant and effective investment mechanism. It is particularly important that the investments will be made in Russia and will be a logical follow-up to Alfa-Bank’s long-term successful activities with hundreds of domestic companies. In the current economic context, the combination of management and human resources with financial resources should help achieve the optimal result’, Alexey Marey, Chief Executive Officer of Alfa-Bank said.
The cooperation strategy is aimed at increasing shareholder value of companies possessing competitive advantages and potential for development in the current macroeconomic environment. A wide range of industries are considered for joint projects, some of the priority sectors include: agriculture, metals & mining, chemicals and petrochemicals, forestry, pharmaceuticals and FMCG. Investment criteria do not necessarily imply the control based on a majority although suggest that at least the blocking shareholder rights in joint investments are guaranteed.
‘A1 has successful experience in enhancing the value of its portfolio companies, achieving financial stability and transparency of companies, as well as improving the quality of their corporate governance. In the current market conditions, given limited access to capital of many Russian companies, the A1 and Alfa-Bank co-investments will result in development of competitive companies and businesses strategically important for the Russian economy’, Alexander Vinokourov, President and CEO of A1 said.
Complementary competences of Alfa-Bank and A1 will ensure efficiency of joint investments. Alfa-Bank will be able to make a significant contribution in terms of access to financing of portfolio companies and unique sector-related expertise gained through more than 25 years of working in the Russian market. The unprecedented experience of A1 in financial turnarounds and implementation of operational improvements at portfolio companies is one of the key aspects to success of the joint initiative.
Information about A1
A1 is a key investment division of the Alfa-Group Сonsortium. A1 is a leading Russian expert in special situations, which involve various economic and corporate challenges. A1 currently manages a portfolio of assets across various sectors in Russia and the CIS.
Information about Alfa-Bank
Alfa-Bank was founded in 1990. Alfa-Bank is a multi-purpose bank offering a full range of banking products and services including retail and corporate banking, investment banking, leasing, factoring and trade financing.
At the end of 2015, according to the IFRS financial statements, total assets of the Alfa-Bank Group, which includes AO Alfa-Bank and its financial subsidiaries, totalled US$31.5 billion, the total loan portfolio amounted to US$21.7 billion and total capital was US$4.3 billion. Net profit for 2015 amounted to US$480 million.
As of 31 December 2015, Alfa-Bank services approximately 255,000 corporate customers and 13.6 million individuals (including 1.9 million retail clients of PAO Baltiysky Bank). In Moscow, Russian regions and abroad Alfa-Bank operates 745 branches, including a subsidiary bank in the Netherlands and financial subsidiaries in the UK and Cyprus.