Arkady Rotenberg and Gennady Timchenko will share with Gazprom the most expensive

Gazprom negotiates the purchase of recipients of multi-billion dollar contracts for the construction of gas pipelines and the Crimean Bridge - Stroygazmontazh and Stroytransneftegaz. This should help the monopoly reduce sanction risks.
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Famous contractors

Structures of Gazprom are negotiating the purchase of its largest contractors - Stroygazmontazh companies from Arkady Rotenberg and Stroytransneftegaz from Gennady Timchenko, told RBC two sources close to Gazprom and a company interlocutor who works with a monopoly. Information about the negotiations for the sale of Stroygazmontazh RBC was confirmed by a source close to the company Rotenberg. Both deals can be closed by the end of the year, first with Rotenberg, then with Timchenko. And in April, Stroygazmontazh will be headed by Gazprom top-manager Stanislav Anikeev, one of the RBC sources says. According to him, the decision on these two transactions was finally made.

Stroygazmontazh and Stroytransneftegaz are known for their participation in major infrastructure projects. The subsidiary of Stroygazmontazh built the Crimean Bridge (the total cost of the project is 228 billion rubles). Both companies were contractors in the construction of the Power of Siberia gas pipeline and are now taking part in the construction of Nord Stream 2. The cost of these projects is estimated at more than 1 trillion rubles. and € 9.5 billion, respectively.

The Timchenko and Rotenberg companies are planning to buy out Gazprom’s own contractor, Gazstroyprom. The company was created last year, 49% - from Gazprom, the rest - from the structures of Gazprombank and individuals. Gazstroyprom has already withdrawn the assets of the third largest contractor of Gazprom - Stroygazconsulting, and in case of completion of the deals with Rotenberg and Timchenko the company will be the largest contractor of the monopoly. In 2015–2018, Stroygazmontazh, Stroytransneftegaz and Stroygazconsulting received contracts of almost 1.5 trillion rubles from Gazprom.

The RBC interlocutors do not disclose the asset purchase price and financing scheme. “The cost of companies is rather difficult to estimate,” says Dmitry Marinchenko, director of corporate affairs at Fitch rating agency. - In the free market, it would first of all be correlated with the portfolio of orders and reputation. In Russia, probably, political factors may also have an impact on costs. ”

Sanction risks

Perhaps Gazprom is discussing the buyout of contracting companies in order to remove the sanction risks. "The monopoly intends to increase its market share in Europe and in the face of fierce competition with the Americans wants to eliminate all possible reasons for criticism, including because of the sub-sanctioned contractors," one of RBC's interlocutors explains the likely motive for the deal.

Now, theoretically, Gazprom can be blamed for financing the sanction companies, agrees Mergen Doraev, a lawyer at the EMPP Law Office. “Most likely, the deal is aimed at preventing accusations in transactions with contractors - sanction companies. In this case, the purchase of Gazprom can be structured in the same way as a transaction was made to withdraw from the sanctions of the Renova subsidiary Sulzer. In this case, the funds will be blocked on a special account, access to which the seller will receive in case of withdrawal of sanctions, ”explains Doraev.

Arkady Rotenberg and Gennady Timchenko, together with the companies-contractors of Gazprom, fell under the sanctions of the EU and the United States in early 2014. However, this did not prevent them from continuing to work with the monopoly, having received large-scale contracts, in particular for the construction of Power of Siberia and Nord Stream-2. “It’s not quite clear why Gazprom went for it right now, years after the contract hit the sanctions. There are probably some business agreements that we are not yet aware of, ”says Yevgeny Zhilin, a lawyer at Quorus GmbH, believing that by buying companies from those involved in the sanction lists, Gazprom could take the risk of secondary sanctions.

Marinchenko notes that the deal looks logical in the context of the recent efforts of the government to strengthen control over the investment programs of companies. “Although it goes against the global trends of the last decades - when most of the service work is outsourced,” he says.

"I have no information on this issue," - told RBC representative Rotenberg. The representative Timchenko declined to comment. In Gazprom and Gazprombank have not yet responded to requests from RBC.

What will remain with Rotenberg and Timchenko

Arkady Rotenberg created Stroygazmontazh in 2008 and then, through the Cyprus offshore companies, he bought five construction subsidiaries from Gazprom, along with contracts: Lengazspetsstroy, Volgogradneftemash, Spetsgazremstroy, Krasnodargazstroy and Volgogaz with total turnover of 43.5 billion rubles. in 2007. For construction assets Gazprom received 8.3 billion rubles.

Stroytransgaz (formerly Stroytransneftegaz) has been a major contractor for Gazprom since Soviet times. When the monopoly was headed by Rem Vyakhirev, it provided Stroytransgaz with 80% of its order book. In 2007, the structures of Gennady Timchenko gained control over Stroytransgaz.

The state of Arkady Rotenberg and Gennady Timchenko in 2018 Forbes estimated at $ 3 billion and $ 16 billion, respectively. In addition to Stroygazmontazh, Rotenberg has another 80% in the company Minudobreniya, 35% in TPS Avia (controls Sheremetyevo International Airport), 50% in SMP Bank. The total revenue of these companies for 2017 is slightly more than 30 billion rubles, which is ten times less than the revenue of Stroygazmontazh for the same period (362 billion rubles).

In April last year, a businessman bought Mostotrest, the largest contractor in the infrastructure market, a subcontractor for the construction of the Crimean bridge with an order portfolio of 365.5 billion rubles from NPF “Prosperity”. Today, the state allocates significant funds for the development and reconstruction of the road sector: for example, according to the results of 2018, it is about 754 billion rubles, ACRA analyst Maxim Khudalov draws attention.

For Timchenko, Stroytransneftegaz is an important, but not the main asset. The businessman also owns 23.5% in the gas private company NOVATEK, 17% in Sibur (engaged in petrochemistry), 80% in Transoil. Timchenko’s share in Novatek now stands at 752 billion rubles, while Sibur’s share based on preliminary estimates for an IPO is $ 3–3.4 billion (about 200 billion rubles at the current Central Bank rate).