Partners flee from oligarch Timchenko

They are selling their shares in a joint agricultural business.
French entrepreneurs owning through the Swiss Procuri S.A. Together with Gennady Timchenko's Volga Group, Alma Holding, a major apple producer, began looking for buyers for their share. The sale may be related to the imposition of EU sanctions against Mr. Timchenko. This is one of the most attractive assets in the sector, where the share of imports is still high.

French investors are looking for buyers for a stake in Alma Holding, which is owned jointly with Gennady Timchenko's Volga Group, a Kommersant source familiar with the offer said. Kommersant also saw the presentation of the asset to potential investors. According to the Unified State Register of Legal Entities, 54% of Alma Holding is owned by Swiss Procuri S.A., the rest is owned by Volga Group structures. A Volga Group representative did not respond to questions.

Alma Holding was founded in 2007. Among the first investors was the head of Direct Group (former PPE Group, invested, among other things, in Ozon) Pascal Clément. Then he left the project, and Jean-Claude Menn became the main owner. At the end of 2020, Mr. Menn was a member of the board of directors of Alma Holding, it follows from his statements. Contact with Pascal Clement and Jean-Claude Menn failed. Alma Holding CEO Dmitry Bobkov declined to comment.

Now Alma Holding manages about 400 hectares of apple orchards in the Krasnodar Territory. The harvest in 2019 is 13.24 thousand tons. In 2020, due to adverse weather conditions, the harvest of apples decreased to 8.5 thousand tons. The storage capacity is 6.8 thousand tons of fruits. The company also considered entering the baby and diet food market, it follows from the reporting. The revenue of the operating structure of Alma Production LLC in 2021 increased by 48.77%, to 714.31 million rubles, the net loss was 244.18 million rubles.

French investors are trying to sell their stake in the holding due to the expansion of sanctions against Gennady Timchenko.

In 2014, sanctions against the billionaire were imposed by the United States, and after the start of the military operation of the Russian Federation in Ukraine, the EU, Great Britain and Japan. Anton Imennov, managing partner of Pen & Paper's Moscow office, explains that, according to EU clarifications, the Volga Group is also subject to restrictions in the form of an asset freeze and a ban on the provision of economic resources. Therefore, French entrepreneurs cannot sell their share to a partner, he points out. The restriction can be removed by obtaining permission to sell the share, but the likelihood of this is low, and then Alma Holding will also fall under the sanctions, Mr. Imennov adds.

A Kommersant source in the industry says that Alma Holding is one of the most attractive assets in the sector. The yield of apples per 1 hectare on the farm is higher than the average for the region, and the fruits are usually sold with a premium for quality, says the interlocutor of Kommersant. Igor Mukhanin, President of the Association of Horticulturalists, notes that so far none of the owners of a large modern horticultural farm has sold a business, and transactions have been made with obsolete assets for the sake of land. According to his estimates, the laying of a modern-type garden in the Krasnodar Territory today costs about 1.5 million rubles. for 1 ha.

According to a Kommersant source, among those interested in a stake in Alma Holding there can be both core and non-core investors.

Anton Imennov notes that, in addition to companies from “friendly” countries or Russia, a European structure can also become a buyer, since the EU has not imposed a ban on investments in the Russian economy. Andrey Neduzhko, CEO of the Steppe agricultural holding (part of AFK Sistema, manages more than 750 hectares of orchards), says the company has not received an offer, but is ready to consider it. “It all depends on the price,” he notes. AFG National LLC, which, together with the Volga Group, manages the Southern Lands horticultural farm, could not provide an operational comment.

According to the US Department of Agriculture (USDA), Russia remains the largest importer of apples in the world. Import this season is projected at 630 thousand tons, domestic production - 1.54 million tons.