Plans for € 1bn
One of the largest operators of water supply in Russia - Rosvodokanal (RVC) - in partnership with the Russian Direct Investment Fund (RFPI) and the French utility operator Veolia plans to increase revenues by almost 4.5 times, to € 1 billion. general director of the group Anton Mikhalkov.
"We discussed the company with partners at some time horizon. Today, the RVC group has consolidated revenues of about 17 billion rubles. per year, in this partnership we want to see revenue growth of up to € 1 billion a year on the horizon of five to seven years, "the top manager said.
Rosvodokanal is included in the Alfa Group of Mikhail Fridman, Herman Khan and Alexei Kuzmichev. The company occupies 24% of the market for private utilities (5% for the market as a whole) and serves more than 5 million people. According to analyst of Finam Alexei Kalachev, Rosvodokanal can cost about 20 billion rubles
Resource for promotion in the regions
In early May, RBC wrote that Alfa Group was considering selling Rosvodokanal, which it owned for 15 years. At the same time, the press service of the company claimed that there were no agreements on the sale. Analysts pointed to high risks of the municipal business due to the uncertainty of the tariff policy. On May 24, RFPI announced that together with Veolia plans to invest in Rosvodokanal. Later, Khan clarified that new investors intend to enter Rosvodokanal's capital up to "equal partnership" (50/50).
Anton Mikhalkov explained to RBC that RFPI and Veolia will buy at least a blocking stake in the company. According to him, it is about investing in hundreds of millions of dollars. By the end of June, the parties will sign a letter of intent (agreement on intentions) containing the key parameters of the transaction, it is planned to complete it by the end of the year, he added.
In partnership with new investors, Rosvodokanal plans to increase revenues through new contracts and concessions. "I'm not ready to talk about new concessions. We have today on the agenda the task of completing the deal to sign the agreement in Arkhangelsk. From a dozen cities we are working from a technological point of view, "the head of the company said.
At present Rosvodokanal is present in six cities - Barnaul, Krasnodar, Omsk, Orenburg, Voronezh and Tyumen. From a number of regions, the company had to leave because of conflicts with local authorities. In 2012, the group was forced to abandon the Kaluga Vodokanal because of a conflict with the local governor Anatoly Artamonov. In 2016, the Tver authorities complained to the operator about the inadequate condition of the water supply system, as a result, in February 2018 the Tver "daughter" of Rosvodokanal returned to the property of the region. At the end of March 2018, the Arkhangelsk prosecutor's office challenged the Rosvodokanal concession agreement with the city administration in court. Now the company applied for permission to the Federal Antimonopoly Service to prove the absence of any violations.
Rosvodokanal's presence of such partners as the sovereign fund of RFPI and Veolia will help to solve the problems of the group with the regional authorities, but it will happen only after the transaction is completed, said Aleksey Antonov, an analyst with the investment company Alor.
Plumber through the application
Another planned source of revenue growth - the sale of related services to the population, tariffs for which are not regulated by the state, told RBC Mikhalkov. For example, if the equipment is clogged or damaged, it will be possible to call the plumber through the mobile application, he says. "We tested this product last year, now it is undergoing additional testing on the platforms Apple and Google Play. In the near future this accompanying service will work in the regions of our presence, "the top manager promises.
The company is also considering the possibility of developing a technological model for the provision of snow melting services. This service can be very popular, especially in the Siberian region, says the head of Rosvodokanal.
Antonov from "Alora" believes that increasing revenue to € 1 billion is quite an achievable task for Rosvodokanal, together with Veolia and RFPI. According to him, the rate for additional services and new concession agreements is a logical step. In turn, revenue growth will improve the quality of services, upgrade networks, attract new private investors, and help the development of a number of service companies for technical support and repair for customers.