VTB has figured out how to get rid of the toxic assets of its development "daughter" Hals. The State Bank plans to create a special fund, which will include illiquid assets of the developer, generating debt in the amount of about 30 billion rubles. The new structure, which should be launched this summer, can be managed, in particular, by two large commercial facilities - the Kamelia Hotel and the Nevskaya Town Hall business center in St. Petersburg, which was opened for the 2014 Olympics in Sochi. After Gals came under VTB control in 2009, the company's debt level almost quadrupled, and the company has long tried to solve the problem of excessive debt.
VTB plans to withdraw the illiquid assets of Hals into a separate fund, three sources told Kommersant. According to one of them, the fund is needed to reduce the developer’s debt burden: the structure will include assets generating debt to the bank in the amount of about 30 billion rubles. It is assumed that commercial real estate will go to the fund - in particular, the Kamelia Hotel, which Hals built in Sochi for the 2014 Olympic Games, and the Nevskaya Town Hall office center in St. Petersburg. VTB and Hals declined to comment.
Two interlocutors of Kommersant know that some of the employees of Hals wrote a letter of resignation to switch to work in a new fund, which is due to work in June. Another source of Kommersant adds that the fund is not a client story, that is, it is not planned to attract shareholders, and the fund itself is needed for the convenience of managing problem assets. He assumes that in addition to the toxic assets of Hals, objects of other development "subsidiaries" of VTB may fall into the new fund. Among the companies under direct and indirect control of the state bank are Donstroy Invest and VTB Arena. If the first company, which mainly builds business-class housing in Moscow, has revenues growing through the sale of apartments, then VTB Arena manages one of the most complex sports facilities in the capital - the former Dynamo Stadium.
Hals builds both housing and commercial real estate. In 2019, the company built 500 thousand square meters. m. VTB became the main shareholder of Hals in 2009, when it acquired a controlling stake (51.24%) of the developer from AFK Sistema for 60 rubles in exchange for debt restructuring. In 2015, the bank increased its ownership interest in the company to 96.4%, but the loan burden increased along with the package. If in 2009 the debt of Hals to VTB amounted to about 22 billion rubles, then the latest statements of the company dated the end of September 2019 indicate the amount of long-term liabilities to banks in the amount of 80.5 billion rubles. In 2018, the volume of loans that need to be paid in more than 12 months was estimated at 78.8 billion rubles, in 2017 - at 75.4 billion rubles.
A high level of debt prevents Hals from obtaining loans for new projects, one of Kommersant’s interlocutors notes. He recalls that the company had long planned to restructure its obligations, and in the summer of 2019 a new management team from VTB came to Hals, which just managed to agree with the bank.
Sayan Tsyrenov, Director of PwC Real Estate Transactions Support Practice in Russia, believes that the fund’s story is an “elegant” solution to the long-standing problem loans problem that were received before the 2009 crisis. Tactics Group Chief Financial Officer Andrei Novikov suggests that this move may mean Gals pre-sale preparation, including to minority investors.
The creation of the fund will not allow VTB to solve the problem with Hals bad debts, says Mikhail Ganelin, senior analyst for the banking sector of Aton investment company. 30 billion rubles. are not a significant amount for VTB, adds BCS Global Markets analyst Elena Tsareva, therefore, most likely, the fund should solve the problems of the developer, not the bank.