After the resignation and possible departure abroad of Maxim Basov, SUEK will continue to buy up the assets of state-owned companies

July 9, CEO of the Siberian Coal Energy Company (SUEK) Maxim Basov resigned. His predecessor, the son of the famous writer Stepan Solzhenitsyn, resigned in April last year, however, then returned to another position. The personnel reshuffle at the very top of Andrey Melnichenko’s coal empire does not in the least prevent it from acquiring more and more assets, which it buys profitably from Gazprom and RusHydro.

Over the past two or three years, SUEK has been successfully collecting large assets, rapidly becoming one of the largest players in the energy market. In 2019–2021, it directly or indirectly became the owner of Krasnoyarskaya GRES, Primorskaya GRES, Reftinskaya GRES and a number of others enterprises. Assets were acquired from state-owned companies such as Gazprom, Rosatom and RusHydro, and, according to the industry telegram channel SovetBezRynka, at a price significantly different from the market.

In April of this year Maxim Basov reported that the Siberian Generating Company (SGK), which is part of SUEK, acquired Novomoskovsk GRES. A few days later, SUEK denied this information, saying that neither they nor SGK bought this enterprise. It was reported that NAK Azot, which is part of EuroChem, became the owner of the GRES. But let’s not forget that both SUEK and EuroChem were created by one person – Andrey Melnichenko.

There is every reason to expect that SUEK’s expansion in the Russian energy industry will continue. Now the Ryazan State District Power Plant may be at stake, which the coal holding also wants to put into the treasury of its assets. An important point: Ryazanskaya GRES is part of PJSC OGK-2, a subsidiary of Gazprom, from which SUEK already acquired Krasnoyarskaya GRES-2 in 2020. The parties to the transaction reported that its price was 10 billion rubles. The station was transferred to the new owner, along with all movable and immovable property, coal reserves, spare parts and, as stated in a press release, “other material and technical resources.” For reference: Krasnoyarsk GRES-2 accounts for up to 2.14% of electricity generation in the United Energy System of Siberia, it was the only asset of Gazprom Energoholding in this zone.

Like public, only private

The acquisition of power plants makes SUEK the largest player in the energy market. Some associate this process with the Deputy Prime Minister Alexander Novak, who allegedly lobbies for the rapid development of the company founded by Andrey Melnichenko. And it’s true – could she, without support from above, seize such powerful assets in her hands? In May last year, the FAS filed an antimonopoly case against SGK (which, we recall, is part of SUEK), seeing in its actions the manipulation of electricity prices in Siberia. The agency believes that the company occupies a dominant position in the price zone. In the first half of 2022, she submitted an application at the auction for the sale of electricity with amounts inflated by almost 20%. The company called the claims of antimonopolists unfounded. However, we could not find information about how the proceedings ended in open sources.

By the way, in February Maxim Basov said that “SGK is faced with the task of changing the energy strategy of Russia”. But even if we consider this goal justified, it should be understood that only some state corporation can realize them. However, SUEK remains a private company, and its founder Andrey Melnichenko is the only Russian billionaire who managed to get citizenship of the United Arab Emirates.

Longing for London

The new place of work of Maxim Basov is unknown, as well as the reasons that prompted him to leave SUEK against the backdrop of the company’s global ambitions. There are rumors in the industry that he could have left Russia, and it cannot be said that they are without foundation. Mr. Basov began his career in the Moscow office of the consulting firm McKinse, where, by the way, the previous CEO of SUEK, Stepan Solzhenitsyn, also worked. Since February last year, many employees of this organization chose to leave the territory of the Russian Federation. It is impossible not to mention that, commenting on his resignation, Maxim Basov emphasized that he still holds the position of vice-chairman of the World Coal Association. The headquarters of the association is located in the capital of Great Britain.

The situation in which the owners and top managers of the Russian power industry are changing their countries of residence like gloves is hard not to be considered surprising. Nevertheless, we are talking about a strategic industry, on the state of affairs in which absolutely the entire Russian industry, both military and civilian, depends. Who knows, maybe Andrey Melnichenko was given to understand that the owner of such assets must make the final choice: here or there? It is difficult to explain otherwise his desire to return to the SUEK shareholders despite the sanctions. And if so, then the demand to determine the center of one’s vital interests could have been made in relation to Maxim Basov. It looks like he made his choice.

By the way

After the well-known events of the spring of 2022, Andrey Melnichenko left the SUEK shareholders, but, as far as one can understand, he continued to influence the company through his wife, who became the new owner of the shares. The reason for the change of ownership is Western sanctions. In April, the billionaire came to the conclusion that these actions were erroneous, because they created inconvenience for his family and did not solve the problems of the company. As far as one can understand, now Melnichenko is making efforts to return to the structure of its shareholders. But will he return to Russia himself or continue to live in the emirate of Ras al-Khaimah (translated from Arabic as “top of the tent”) in the north of the UAE, where, according to Forbes magazine, he settled after receiving citizenship of this country?