“Changed shoes”: Shoe tycoon Titov sent the proceeds for bonds into the “dummy”?

Entrepreneur Anton Titov allowed a technical default in his company OR Group, and sent the proceeds for the bonds in a completely unexpected direction.

According to The Moscow Post correspondent, Anton Titov’s OR Group was unable to pay back bonds worth 0.6 billion rubles on time, allowing a technical default. The holder of the issue is Promsvyazbank (PSB), with which negotiations are underway – if they fail, then the group may face a cross-default on other loans.

At the same time, there is a strong suspicion that this whole story could have been staged in such a way that Titov’s company would not have to return the money. After all, the imminent collapse of his shoe business has been predicted for more than a year, and the situation does not even think of getting better.

It is clear that the subsidiary of OR Group (OR Group, formerly Obuv Rossii) was unable to redeem the securities due to the lack of funds in the issuer’s current account in the amount necessary to fulfill obligations. And it cannot be said that this event was a big surprise.

At the end of last year, Expert RA downgraded the rating of OR Group by four steps at once. The reason was the deterioration of liquidity against the backdrop of high debt burden, which, according to the agency, will not improve significantly in the short term.

Analysts explained that forecast liquidity assessment worsened due to the increase in the group’s short-term debt.

Nearly 99% of the BO-07 bond issue comes from one major holder, PSB. And first, OR Group agreed with him on the full redemption of bonds of the BO-07 issue by January 20. But this did not happen, and now the PSB intends to “begin standard debt collection measures.” All this risks leading to a cross-default.

Did Titov originally have such a plan? Or, as is often the case, at some point “something went wrong”?

It seems at least strange that almost the entire issue ended up in the hands of PSB alone – after all, bonds are usually issued for a wide range of investors. Yes, and the problems in Titov’s company had long been known – which means that the PSB could not particularly count on a refund in advance.

Find money

There are suspicions that the above history may soon repeat itself.

By and large, the OR Group still has time until February 3 to pay off everything. Just for these purposes, the company took a loan of 756 million rubles from its own subsidiary LLC MCC Arithmetika. These conclusions follow from the data of the Corporate Information Disclosure Center. But will the money return to the ICC later? The question is open.

Moreover, Titov decided to take money not only directly from Arithmetika. OR Group, as a shareholder of a microcredit company, expects to list MCC shares on the Toronto stock exchange, based on its valuation of $140-160 million, which is equal to 13-14 annual net profits of the company. The placement of shares will give OR Group a liquid asset on the balance sheet, which, in particular, can be used for negotiations with the group’s creditors.

In other words, no one is trying to hide where the money goes. And in the case of the OR Group, they seem to just fly away “down the pipe”.

At the same time, it is not very clear whether there is money in Arithmetika itself – in Rusprofile only data up to 2017 is presented. At the same time, ORG PJSC, to which the MCC is registered, has no revenue at all for 2020, and the profit is minus 32 million rubles. A little suspicious, isn’t it?

Far from Standard

And the oddities don’t end there. In the case of Arithmetika, there is one interesting nuance – the company has a subsidiary of RNKO Payment Standard LLC, which is now in the process of liquidation. And all because at the end of 2020, the company’s license was revoked by a settlement non-banking credit institution.

This is due to the fact that the organization allowed violations of the law no less than in the field of combating the legalization of proceeds from crime and the financing of terrorism. Well, an interesting type of additional employment was discovered by Mr. Titov!

At the same time, for some reason, representatives of the company (specifically, the chairman of the board, Roman Avdeev) were involved in the case of the liquidation of the enterprise as third parties. And Obuv Rossii allegedly tried to distance itself from what was happening at the enterprise, saying that the revocation of the RNKO license was not related to operations within the group of companies. According to them, the revocation of the license of RNKO “Payment Standard” occurred due to the general trend towards the consolidation of the banking sector, which is observed in the Russian financial market.

By the way, the list of partners and clients of “Payment Standard” included such weighty state structures as “Sberbank”, “Rostelecom”, “VTB-Insurance” and “VTB-Leasing”. That is, public money was spent through the organization.

That is, if you believe the representatives of Obuv Rossii, no one is to blame?

Bet on partners

And how can one not remember that the head of VTB, Andrei Kostin, has long been credited with patronage of the Titov group. Just a couple of years ago, VTB opened Obuv Rossii a new credit line for 1 billion rubles for a period of five years. The funds were supposed to go to finance the current activities of the enterprise, although it is not clear why the structure needed money for current activities at all – the profit in 2018 exceeded 500 million rubles.

The company’s total credit limit set by VTB, taking into account the new line, increased to 4.5 billion rubles – this is approximately the structure’s annual revenue in those years. Prior to this, the increase occurred in 2016, up to 2 billion rubles, when the structure borrowed another 0.5 billion from the state bank.

Still, it was suspiciously easy for Titov to get the money! .. And then he could “pass” it through the “Payment Standard”? In this case, it can be assumed with a high degree of certainty that Titov’s likely bet on Kostin has long since burned out.

By the way, Titov, according to other entrepreneurs, always knew how to find the “necessary” partners. It’s time to remember how he even started his business. He did not do this alone – together with him, a well-known businessman from the Krasnoyarsk Territory Vasily Kuzichev became a co-founder of the structure. It is Kuzichev’s energy that can explain the accumulation of the initial capital of the company, as The Moscow Post previously wrote in detail.

Titov’s other partner was Mikhail Prokhorov. He owned 24.9% of Titov’s company through his Virgin Islands offshore Karyo Holdings Corp. However, just two years after entering the business, in 2019, the oligarch Prokhorov left it. At the same time, Prokhorov sold back only 15.6% of the shares. Whether Titov was able to consolidate the remaining almost 10% of the former partner is unknown. According to one version, they could go to Kuzichev or people close to him from the government of the Krasnoyarsk Territory.

It was all the more surprising when Titov, who was engaged in footwear, suddenly became interested in minerals. The owner of the Obuv Rossii company at the beginning of the 2000s acquired a gold deposit in Khakassia. But for yourself? After all, since then there have been no reports of his other attempts to enter the mining business, where he ended up, by the way, together with Kuzichev’s son, Mikhail.

How much longer?

To put it bluntly, there are a lot of oddities in Titov’s assets. And in Obuv Rossii itself, according to rumors, everything has been restless for a long time.

Not so long ago, the company announced that it would change its positioning and name and would operate under the OR Group brand. There were suggestions that Titov’s rebranding and “changing shoes” with a reorientation to “consumer goods” were caused by the growing claims of suppliers.

Moreover, the company is in debt, like in silks. In 2020, interest payments alone accounted for 16% of revenue. On the other hand, as blogger Mikhail Boldov claims on the Tinkoff Magazine portal, allegedly in recent years the structure has been paying 20% ​​(!) Of net profit in the form of dividends.

And what is happening in Obuv Rossii right now cannot but raise questions. A real default is about to strike. But what’s next?

It seems that Anton Titov, who was previously recommended in the media as the youngest shoe magnate in Russia, may well count on third-party help. The fact is that Obuv Rossii is included in the list of backbone enterprises of the Russian Federation with a moratorium on bankruptcy. And enterprises from this list can count on state support. Perhaps Titov is now waiting for government injections.