Fund Sherbovich explained the reason for buying shares of “Transneft”

“Conceptual agreement”

In November 2011, UCP and “Transneft” have agreed that the Fund will buy shares of a monopoly in the market in order to later possibly sell them the monopoly. It follows from the document entitled “Conceptual agreement” signed by the head of the UCP Ilya Sherbovich and head of “Transneft” Nikolay Tokarev (copy of the document is at RBC).

The document itself, judging by the wording, not mandatory, the lawyer of the Moscow city Collegium of advocates Alexey Melnikov. It does not specify the price, and therefore, the agreement is not legally binding and does not violate the rights of other shareholders, he says. Literally from paper it is only necessary that the Fund Sherbovich shall notify Transneft” plans “to implement a project for the purchase” of its preferred shares in the amount of 21.89% of the share capital (that is, to assemble on the market all preferred shares) at the “optimal” price. Transneft, in turn, assures that it will take “all measures necessary to repurchase UCP consolidated package at the agreed price” (numbers not stated in the document).

The representative of the UCP Irina Lanina has confirmed RBC that the agreement is “genuine” and UCP is the original of this document. Transneft denies this: “it is Impossible to imagine circumstances in which such a document could be drawn up”, told RBC representative of the company Igor Demin. The very paper he called the “crudely fabricated”.

Anyway, since 2011, the Fund UCP actually collected on the market for about 71% of the total number of preferred shares, or 15.5% of its share capital (these “Transneft” in January 2016; a representative of the UCP did not confirm the volume of the package, but recognized that the Fund is “significant” shareholder of the company). And at the end of last year, the Fund Sherbovich really could sell shares in the monopoly.

That at the end of the 2015 UCP was ready to sell Transneft your package on the “market price,” RBC had previously said a source close to the negotiations. At that time, 1.1 million of preference shares “Transneft” on the Moscow stock exchange cost 194,3 billion rubles, or about $2.8 billion (at the exchange rate on that day). According to another source, UCP asked for your package of $2.9 billion, Transneft refused and the deal never took place.

Nonclassical buyback

Understanding of UCP and “Transneft” if they were (in 2011), is a kind of non-classical buyback, says analyst of “VTB Capital” Michael Rasstrigin at it from the company, for example, there is no need to inform the minority shareholders that it is considering to withdraw from the market (ordinary shares “Transneft” is not listed).

Why “Transneft” in 2011 may require collaboration with UCP it is not clear. But, for example, in early 2008, only leading monopoly, in an interview with “Vedomosti” Tokarev called the theme of “prefs” to “very sensitive” for the company. “I do not care how they [the preference shares “Transneft”] are listed, how many there are. To build the dividend policy on the “prefs” does not consider it necessary”, he said. Its position in the same interview he explained: in the late 1990-ies “almost all” package of preference shares “Transneft” was in the hands of only three owners.” Their names Tokarev did not name, but noted that it was “very wealthy people”, which in the money of state-owned companies do not need: “For them less than a million, a million more payouts stock does not have large values.

Among the major minority shareholders of “Transneft” in different years were: the holding company “Interros” in 2003, its structure was sold about 20% of the “preferred shares” Transneft “portfolio investors”), the funds Prosperity Capital Management, East Capital International and Vostok Nafta Investment (in 2010, three owned approximately 17%). Since, according to him, the large number of minority shareholders increased to four, and in December 2014 Tokarev said that the company was only one of a large minority shareholder: “They are not four, but one left. And it is the individuals” (quoted by “Interfax”).

The conflict with minority shareholders

UCP is now suing the “Transneft” about the size of dividends for 2013. In addition, through the court, the Fund seeks the state-owned documents on financial transactions and assets of the monopoly, accusing it of billions of dollars of losses on hedging operations (only in 2014 for these transactions the company lost 75.3 billion RUB).

Minority shareholders “Transneft” before there were dissatisfied with the dividend policy of the company and insisted she was paying more dividends. For example, in may 2008, Alexey Navalny demanded from state-owned companies to explain why it spends billions to charity, thereby understating the financial basis for payments to shareholders.

The claims of the UCP is not accidental, said the representative of “Transneft”: “defeated in an attempt to “sell” for $3 billion package bought non-voting shares “Transneft” he [represent] went VA-Bank”, said in response to a request to RBC Demin.

The representative of the UCP to the ball that initiated the failed transaction on the redemption of preferred shares “Transneft” at the end of last year was itself a monopoly. “Proposal to the UCP to sell their shares received from the [first Vice-President “Transneft” Maxim] Grishanina. No one from UCP with such a proposal in “Transneft” not addressed,” said RBC Lanina from the UCP.

Can the presence of a “conceptual agreement,” if she was to help UCP further proceedings with a monopoly is unclear. Judging by the text of the agreement, the relationship of “Transneft” and UCP could be similar to an Agency, but if the case goes to court, the Fund Ilya Sherbovich will have to prove it, says the head of the Department corporate law law firm Sameta Margarita Sologubenko. “Between the parties may have disagreements about whether they have a binding agreement,” says the lawyer. The court will take into account the evidence of the negotiations, correspondence. If they would follow that “Transneft” has confirmed their actions, the intention to buy a consolidated package, the court may admit the truth of the Fund.”