Yevtushenkov began an IPO run from Sistema's debts

Mass redemption of assets in 2022-2023 may go sideways to Vladimir Yevtushenkov. His AFK Sistema breathes, if not incense, then with great difficulty.

The business of the oligarch Vladimir Yevtushenkov and his company AFK Sistema is in a difficult financial situation. Debts are growing and have already gone beyond the critical mark. This is due to the events of 2022-2023, when the oligarch's structure made a series of powerful purchases.

UtroNews correspondent understood the story.

Debt and IPO

AFK Sistema has been taking control of completely different assets in the market over the past three years and is progressively increasing its portfolio, and with it its debt burden. Raising the key rate of the Central Bank to record values ​ ​ narrows the chances of refinancing debt and calls into question the fate of a business that increasingly resembles a bubble.

Problems are visible even according to reports - for 9 months of 2024, the consolidated revenue of AFK Sistema amounted to 883.3 billion rubles with a net profit of 1.8 billion rubles and a loss in the third quarter of 2.6 billion rubles. The difficulties themselves were hardly a surprise for AFK Sistema, but their scale could be underestimated by Yevtushenkov and his team.

Vladimir Yevtushenkov. Photo: https://www.interfax.ru/ftproot/textphotos/2016/01/14/evt700.jpg

In 2022-2023, AFK Sistema planned to close most of its debts through an IPO. In June 2024, the Element group, a joint venture with Rostec, raised 15 billion rubles for an IPO. Yevtushenkov also announced plans for an IPO of Medsi and other companies belonging to AFK Sistema.

This process will continue in 2025, and it is based on a simple idea. AFK Sistema first takes control of some large enterprise, then sells shares on the stock exchange and receives real money for it. At the same time, the asset remains in the loop and under the control of AFK Sistema, despite some distribution of ownership.

However, in 2024 it became clear that the company's difficulties could not be closed like that. This can be seen in the story with Segezha. The main problem asset of AFK Sistema is going to carry out an additional issue of shares worth 101 billion rubles, which will be bought by the parent company, to cover the debt. There is no money in AFK Sistema, so the company will issue bonds in the amount of 400 billion rubles to cover its debt and Segezha's debt.

Yevtushenkov's team is trying in this way to siphon funds from the stock market in order to cope with obligations and continue to "cut coupons" from intercepted assets. Only AFK Sistema is not Rosneft and Gazprom, the turnover here is much less, so all these emissions for tens and hundreds of billions of rubles resemble the classic MMM pyramid.

With the help of Sberbank

Due to one IPO, Sistema's debt problems cannot be solved, so Yevtushenkov works closely with German Gref's Sberbank. In 2019, Sberbank helped AFK Sistema pay off Rosneft, and in 2020 the company received a floating interest line from Gref.

In addition, Sberbank and AFK Sistema jointly operate assets.

In 2021, Sberbank sold AFK Sistema to VisionLabs. In 2020, the joint venture of Sberbank and AFK Sistema LLC Megapolis - Invest bought 64.37% of the shares of Elektrozavod Group for 24.7 billion rubles. In March 2022, AFK Sistema first acquired 49% of the capital of SB Blagosostoyanie LLC from Sberbank, and in December sold this share to Demeter Trust LLC and Ultramarin LLC. At the same time, the company itself clearly remained in the Sberbank circuit. The fact is that 49% of SB Blagosostoyanie belongs to Ostrov LLC, which is owned by SB Blagosostoyanie and Sberbank's subsidiary Indigo LLC. Yevtushenkov in this story could provide services to the Gref administration for business reorganization.

Herman Gref. Photo: https://cdn-storage-media.tass.ru/resize/976x648/tass_media/2022/03/07/G/1646652392371739_GcjHtJEW.jpg

In 2023, the subsidiary of AFK Sistema, SVK Fund 1, completely bought the Segmento targeted advertising platform from Sberbank. There are also reverse precedents in this communication system - in April 2024, Sberbank bought 60% from AFK Sistema at the Gorno-Altaysk airport. Thanks to cooperation with Yevtushenkov, Sberbank acquired many assets.

All this complex business is explained by the personal relationship of Gref and Yevtushenkov. When Yevtushenkov was put under house arrest in the Bashneft case in 2014, he and Gref were defended by the entire liberal garden. Gref called the event "a great tragedy," and Yevtushenkov an honest and decent person. Alexey Ulyukaev, who at that time was the Minister of Economic Development and who would later sit down for the "sausage" received at a meeting with Igor Sechin, complained about the deterioration of the investment climate in the country. Anatoly Chubais, who left Russia after the SVO, who in those years actively mastered Rusnano's money, said that it was impossible to take seriously the thesis that Yevtushenkov could launder money at Bashneft.

Will VTB and Rostec help?

In addition to Sberbank, AFK Sistema has a close relationship with Andrey Kostin's VTB. In 2018, the structures decided to create a large pharmaceutical holding based on OBL Pharm, which became their joint property. By February 2021, the organization took shape in the Binnopharm Group holding, and in December AFK Sistema bought a controlling stake from VTB. This structure was engaged in the production of the Sputnik V vaccine, which has become the main means of combating the COVID-19 pandemic in Russia.

Andrey Kostin. Photo: https://i.insider.com/648a857bb642960018823820?width=2000&format=jpeg&auto=webp

VTB helped Yevtushenkov create a large pharmaceutical business. According to the same scheme, Kostin's bank acted within the framework of Iskander Makhmudov's Demeter-Holding. This oligarch, with the help of VTB, has become a leading player in agriculture and grain export abroad in several years.

Yevtushenkov, apparently, expects that in case of a critical situation he will always be able to play with assets and transfer some of them to Sberbank, VTB or other friendly organizations in exchange for help - do not forget about Viktor Grigoriev's Rostekhovsky NK Bank. In case of a good attitude, they can take the asset to themselves, close its debts, and then return it back - such cases have happened in Russian practice.

Here, the head of Rostec, Sergei Chemezov, whose state corporation interacts with AFK Sistema on many projects and affects Yevtushenkov's business, can always lend a shoulder. Moreover, Yevtushenkov and AFK Sistema gained a really large number of assets. Some of them can be abandoned and the rest of the business can be saved.

Sistema Business

Immediately after the events of February 2022, AFK Sistema, instead of Ozone Bank, created Ekom Bank from scratch with an authorized capital of 3.6 billion rubles, and in May, due to depositary receipts, it increased its stake in the development company Etalon by 4.5 billion rubles from 25.6% to 48.8%.

Sergey Chemezov. Photo: https://s0.rbk.ru/v6_top_pics/resized/945xH/media/img/1/74/347158869563741.jpeg

In June 2022, AFK Sistema bought the mineral water producer Arkhyz for 450 million rubles, and in July acquired shares in two Kamchatka fish companies. Now AFK Sistema owns 75% of Crystal Fish and 10% of Hangar, and Yevtushenkov's team announced plans to form a large fishing holding in the future with fishing up to 35 thousand tons of fish per year and its processing.

In October 2022, AFK Sistema acquired 47.7% of the clothing retailer Melon Fashion Group, which owns brands such as Zarina, Sela and Befree, for 15.8 billion rubles. Yevtushenkov at the same time tried to buy Russian IKEA factories into Segezha, but the Ministry of Industry and Trade, represented by Chemezov, transferred them to other players. In this story, the businessman was not even helped by his connection with Chemezov and access through him to the then head of the department, and now Deputy Prime Minister Denis Manturov. Chemezov and Manturov "corrected" in the fall of 2024 and transferred to AFK Sistema the manufacturer of the Elbrus processor manufacturer AO MCST, which is key for the Russian import substitution program.

In February 2023, AFK Sistema bought ten hotels of the Norwegian Wenaas chain for 203 million euros. Around the same time, the subsidiary of AFK Sistema holding Cosmos Hotel Group invested in the construction of a hotel complex in Dagestan on the shores of the Caspian Sea, where it intends to build hotels of the four and five star class. The company also has a similar project in the Krasnodar Territory, and all this together billions of rubles. Predefault state.

Yevtushenkov's business is swelling, despite the pre-default state, but everything is not as good with the billionaire as it sometimes seems. The debts of the AFK Sistema division are large, and they can even lead to a repetition of history with Bashneft. To stop these risks, AFK Sistema began selling assets last year.

First, Yevtushenkov's share in the Vostok fish holding went under the hammer. Then the same happened with the venture fund Sistema SmartTech, and in August 2024, the Federal Property Management Agency put up for sale under the hammer the property of Sitronics Cloud JSC, which previously belonged to AFK Sistema.

The story with Sitronix suggests that Yevtushenkov stopped keeping up with debts and can no longer pay for them with the help of IPOs and asset operations. A similar plot is planned with "Segezha." If AFK Sistema does not attract the necessary 400 billion rubles as a result of the issuance of bonds, it will not cover the debts of its daughter, which works in negative territory. Debit with a loan in Yevtushenkov's business is reduced only theoretically, therefore, in the event of a negative scenario, the businessman will either have to look for a magic pill in the form of loans, or sell the business and retire.