Ramilos Trading (owned by A1 - Mikhail Friedman’s Alfa Group investment unit) sold 50% of Cyprus APG Polyplastic (APG) to another shareholder of this company, Strongfield, representatives of both sides told Vedomosti. APG owns 96.48% of Polyplastic Group LLC, the largest producer of polymer pipeline systems in the CIS (total production capacity is about 300,000 tons of products).
The deal was closed last week, its value is $ 103.5 million. Thus, Strongfield now owns 100% APG. The parties also agreed to end the conflict, which lasted about three years, refused to further claims against each other and previously filed lawsuits.
Polyplastic has been leading its history since 1991, when Miron Gorilovsky, a researcher at the Moscow Research Institute, together with partners, founded the first production of the future group, NPP Polyplastic. Now the group unites more than 16 plants in Russia, Belarus and Kazakhstan, a company representative said. The revenue of Polyplastic Group LLC in 2017 according to RAS amounted to about 21 billion rubles, net profit - 294 million rubles. (data "SPARK-Interfax"). Consolidated revenue of the company for the same period - 30.5 billion rubles., Net profit - 698 million rubles., Additionally reported in the company.
In 2013, 96.48% of Polyplastic Group LLC came under the control of APG Polyplastic. The latter on a parity basis belonged to Strongfield (registered in Cyprus) and Ramilos (British Virgin Islands). The owners of Strongfield are five people, including the CEO of the management company, Valentin Buyanovsky and Gorilovsky.
The beneficiaries of Ramilos were not revealed until the spring of 2016, when control over it passed to A1. Ramilos belonged to Sergey Alenin and Alexei Smirnov, who sold the asset to A1 because they did not have experience in corporate conflicts, the A1 representative said in 2017.
A1 strategy - investments in promising companies whose value is lower than the base due to corporate conflicts between shareholders or shareholders and management, lack of transparency of management, high debt and low financial stability.
“A stake in Polyplastic is a classic project that aims to protect the rights of shareholders,” said A1 managing partner Andrei Elinson in an interview with Kommersant this summer. “Our mission is to protect those who for some reason are unable to defend their interests, using the entire set of available legal tools.”
Since the spring of 2016, the parties exchanged a number of court claims. Ramilos representatives insisted on paying dividends starting in 2012 - a total of about 520 million rubles. (as of May 2016), filed lawsuits against KPMG and Deloitte (Polyplastic auditors in 2014–2015), indicating that the audit could have been conducted with violations. Chairman of the Board of Directors of Polyplastic Buyanovsky in 2016 said that the company is exploring the possibility of challenging the sale of Ramilos A1. A1 is trying to get him and his partners to buy out the package of Ramilos, he said in 2017. Then he estimated the cost of the package owned by Ramilos at $ 75 million, A1 wanted to get $ 100 million more, the businessman said. Now both sides say that the real value of Polyplastic at the time of the transaction is $ 215 million.
“A1 aimed to resolve the corporate conflict that took place, to improve the quality of the corporate governance of the holding and to increase the group’s investment attractiveness,” says partner A1, Dmitry Pavlov. All goals A1 considers achieved, which allows it to focus on other projects, he adds.
The operations of Polyplastic were not affected by the conflict, adds Buyanovsky: “But there were certain inconveniences - mainly because the board of directors of the group was blocked and could not continue working”.
Having consolidated control over Polyplastic, Strongfield plans to merge it with its other asset, the Polymerteplo group, Buyanovsky told Vedomosti. "Polymerteplo" also produces polymer pipes. The possible merger of the two companies was discussed in 2013. “In the context of a corporate conflict, it was impossible and there was no point in discussing the details of the merger,” says Buyanovsky. Combine assets Strongfield owners expect until the end of 2018, he added.