By John Helmer, Moscow

It’s no surprise that when Alisher Usmanov (left) proposed an initial public offering (IPO) of Megafon, a mobile telephone company he controls, he decided to keep all his shares to himself, and to oblige new sharebuyers to bid for stock being sold from the treasury of Megafon, and from minority stockholder, Sweden’s TeliaSonera. That makes the IPO less a wager on the profitability of Russian telephones, more a referendum on who wants to be Usmanov’s minority shareholding partner.

It is also unsurprising that Goldman Sachs, one of the two co-managers engaged in June to manage the IPO, refused to do so, resigning days ago, just before Megafon completed its prospectus. Goldman Sachs didn’t have such a problem being co-manager of the listing of Yandex, the Russian search engine company, in April of 2011. In December of 2011, Goldman Sachs didn’t walk away from its role as co-manager in a $500 million loan syndicate for Vimpelcom, one of Megafon’s domestic competitors.
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by John Helmer - Wednesday, October 10th, 2012
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By John Helmer, Moscow

Very occasionally it happens that the lie a man tells, or his lawyer, comes back to haunt him.

Here is the judgement in the case of Michael Cherney (Chernoy) v Oleg Deripaska, issued by the UK Court of Appeal on October 3. Not a word of it has appeared yet in the press in London or Moscow.

Deripaska had appealed to the higher court after the trial judge in the High Court, Justice Andrew Smith, ruled in July against his applications for witness protection orders.
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by John Helmer - Sunday, October 7th, 2012
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By John Helmer, Moscow

The two 20-year veteran coalminers who have directed Raspadskaya, one of Russia’s leading coking coal producers, have unexpectedly sold out their stake in the company. According to the terms of the deal announced in Moscow yesterday, Evraz, the vertically integrated steel and mining group controlled by Roman Abramovich (left image), will pay Gennady Kosovoy, currently CEO, and Alexander Vagin, board chairman, $202 million in cash, plus an 11.06% share of Evraz’s equity.

Kosovoy is the coalmine boss; Vagin runs political interference at the regional level and protection wherever required. They haven’t enjoyed being the co-control shareholders, with Abramovich, of the publicly listed company. Even less, they haven’t cared for Abramovich’s pressure to pay him dividends from Raspadskaya’s profit — and that was when the mining company was making a profit, and when the two veterans wanted to reinvest the proceeds in the mine itself. Because Raspadskaya was the only half-way independent coal supplier to the steel industry in Russia, its takeover by Evraz significantly reduces competition in the Russian market.
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by John Helmer - Friday, October 5th, 2012
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By John Helmer, Moscow

The Canadian valuer hired to provide an independent valuation of High River Gold (HRG) for Nord Gold’s takeover offer appears to be recommending a higher price than Alexei Mordashov, owner of Nord Gold and 75% shareholder of HRG, wants to pay, leaving the takeover in limbo.

Paradigm Capital’s research department, headed by Daniel Kim of Toronto, has been working on the valuation since July, when Nord Gold announced a share swap or cash purchase equivalent to C$1.40 per share of HRG. That valued HRG at C$1.18 billion. To consolidate the minority shareholders, and absorb HRG entirely into Nord Gold – with the aim of lifting the latter’s struggling share price and worsening financial performance– Mordashov with 75% of the HRG shares in hand needs to have his bid accepted by another 15%. If he can reach or cross the 90% stake threshold, under Canadian takeover rules the remaining shareholders can be squeezed out by a mandatory buyout. As told in this sequence, the opposition to Mordashov has been successful so far in denying him the prize.
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by John Helmer - Wednesday, October 3rd, 2012
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By John Helmer, Moscow

It takes a Russian to know how to build a Potemkin village, and hide behind it. It takes Alexei Mordashov to answer questions through a telephone number that rings in Amsterdam only to be relayed to a Moscow office, where the person in charge hangs up the receiver. That’s a false front that doesn’t deserve Count Potemkin’s name tag.

Mordashov is the owner of Nord Gold, the struggling goldminer spun out of the Severstal steel group. Since July 18, Nord Gold has been tabling an offer to buy out the minority shareholders of Toronto-listed High River Gold (HRG), the richest of the assets in the Nord Gold portfolio. Tabling isn’t quite what has happened. That’s because there won’t be an official offer to buy the remaining HRG shares until a purportedly independent valuation of HRG is completed and the share price offer put into a circular. That is a paper which Mordashov is promising to despatch to the hold-out HRG shareholders sometime soon. For the July 18 proposal, and the reaction of the market, read this.
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by John Helmer - Tuesday, October 2nd, 2012
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By John Helmer, Moscow

United Company Rusal, the Jersey-registered aluminium monopoly of Russia, has announced that “Mr Barry Cheung resigns as Chairman of the Company with effect from 1 October 2012, but will remain as an independent non-executive director of the Company. The Board is pleased to announce that Mr Matthias Warnig, an independent non-executive director of the Company, has been appointed as Chairman of the Company with effect from 1 October 2012.”
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by John Helmer - Tuesday, October 2nd, 2012
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By John Helmer, Moscow

Journalists arranging tuxedo events to give themselves prizes are even sillier than Hollywood actors at the Oscar ceremony. There are also no comedians to tell jokes to neutralize the gastroenteric reflex that is always brought on in audiences by a surfeit of brown-nosing. For the British children in the audience who don’t know what that term means, the Private Eye term is the more onomatopoetic — arslikhan.

Meg Bortin, the second editor of the Moscow Times and one of the shortest termers, has been rolled out for today’s celebration of the 20th anniversary of the Times. The true anniversary actually fell in March, eight months ago. But if that was the point from which to hang the anniversary celebration, Bortin couldn’t call herself the “founding editor in chief”.
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by John Helmer - Monday, October 1st, 2012
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By John Helmer, Moscow

Gazprom, Russia’s largest company, has announced a plan to supply liquefied natural gas (LNG) it isn’t producing to terminals piping ship fuel into a fleet of vessels which the Summa Capital group, directed by Ziyavudin Magomedov, would like to operate — only they don’t exist either. The scheme is more environmentally friendly than any in Russian naval history, only it is a fiction. Why?

The official announcement appeared in Moscow on September 20. Gazprom and Summa Group had signed a Memorandum of Understanding (MoU), the announcement said, “fix[ing] the intentions of the parties to arrange cooperation for LNG utilization as a bunker fuel for marine vessels, including those owned and operated by Summa Group. In the first instance, Gazprom Group and Summa Group will consider the possibility of cooperation in the North Sea and the Baltic Sea regions. Apart from LNG supplies for Summa Group needs, the parties will consider potential development of the bunkering infrastructure in the North and Baltic Seas, particularly LNG storage facilities.”
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by John Helmer - Monday, October 1st, 2012
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By John Helmer, Moscow

Wednesday September 26 was Yom Kippur – the annual Day of Atonement for Jews, the most solemn holiday on the Jewish calendar, when according to the relevant Scripture, God opens his Judgement Book, and takes applications from everyone with an interest in having the black mark removed from his name. God’s finger is moving; in Israel, where Michael Cherney lives, nothing stirs.

In London, according to records of the High Court registry, an application was lodged to postpone the scheduled restart of the proceedings in Michael Cherney v Oleg Deripaska until next Tuesday, October 2. Advocates for each side had already presented their opening arguments to the presiding judge, Andrew Smith, in July, before the court took its summer recess. The trial schedule had provided for witness testimony and cross-examination for several months, starting this week.
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by John Helmer - Thursday, September 27th, 2012
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By John Helmer, Moscow

The co-founder of the Mechel steelmaking and coal-mining group, Vladimir Iorikh, always said the over-confidence of partner Igor Zyuzin (parachutist) would get the company into trouble as big as this. So, rather than go down in flames himself when the crash he expected would come, Iorikh sold out to Zyuzin in January 2007, taking $1.5 billion to Switzerland and setting up on his own.

Zyuzin congratulated himself on out-smarting Iorikh when Mechel’s value in the market grew to a peak of $21 billion in May 2008. Zyuzin’s stake of about 67% was then worth $14 billion. Today, with Mechel worth just about one-tenth of that at $2.9 billion, Zyuzin’s stake is worth $1.9 billion; maybe less, because in July Zyuzin started selling shares – a 1.93% bloc was let go to an unidentified buyer at an unreported price. If things continue to get worse for Mechel, Zyuzin’s net worth will be less than his old partner’s. If Iorikh was as prudent as he accused Zyuzin of not being, it’s probable that he vaulted over Zyuzin in the wealth brackets some time ago.
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by John Helmer - Thursday, September 27th, 2012
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