Otkritie Holding filed a lawsuit against LUKOIL with the Moscow Arbitration Court. He wants to challenge several deals involving the acquisition of diamond miner AGD Diamonds from an oil company for $1.6 billion six years ago. An entry about this appeared on the Fedresurs website on behalf of the bankruptcy manager of the holding, Maria Bulatova. The holding asks to recover 12 billion rubles from LUKOIL. in the form of the difference between the market and nominal value of the rights of claim. AGD is developing the diamond-bearing deposit named after. V. P. Grib on the territory of the Arkhangelsk region.
The financial analysis of Otkritie Holding revealed a deal that meets the signs of suspicion and fits within a three-year period before the date of initiation of bankruptcy proceedings against the holding (July 2022), Bulatova told Vedomosti. The representative of “Trust”, the largest creditor of the bankrupt holding, confirmed its intention to invalidate the related transactions within the framework of the acquisition of AGD. Bulatova and the representative of the Trust did not explain on the basis of which conclusions were drawn about the suspiciousness of the transactions.
LUKOIL is a bona fide seller under the deal and will take appropriate measures to protect its legitimate interests by all available means, the representative of the oil company emphasized.
The deal with LUKOIL consisted of three parts: the purchase of the diamond miner’s shares for $1.05 billion, the repayment of AGD’s $400 million debt to LUKOIL, and the acquisition for $170 million of Grib Diamonds, a trading company that sold mined diamonds at auctions. The buyer of AGD was a company from the structure of Otkritie Holding – OOO Otkritie Industrial Investments (OPI).
The purchase of the enterprise was financed by banks. Among them was FC Otkritie, controlled by the holding, but VTB issued the bulk of the funds. The State Bank provided a loan to OPI for almost 60 billion rubles. (about $1 billion). In addition to guarantees for $1.5 billion, VTB received as collateral all the companies involved in the transaction, including the shares of AGD itself.
Back in 2020, the FAS tried to cancel the deal through the court. The antimonopoly department drew attention to the fact that the holding concealed the fact that three of its shareholders had foreign citizenship. The Federal Antimonopoly Service also reported that the purchase aroused suspicions of the Central Bank during the reorganization of FC Otkritie Bank: the amount was more than 2 times the value of the enterprise. The market price of AGD at the time of the transaction, the Trust said at the time, did not exceed $700 million. In July 2022, the court terminated the proceedings on the FAS claim – the case ended with an amicable agreement.
To calculate the market value of the asset, the parties engaged the Big Four auditing and consulting company PwC (now its Russian division has been renamed Trust Technologies) – according to the presentation that Vedomosti has, at the end of June 2016 it valued the diamond miner together with trader in the range of $1.47-1.62 billion. Otkritie Holding paid a rather high price for AGD, Vedomosti experts said in 2017: for the transaction, AGD is valued at a multiplier of 5-6 EBITDA (based on the EBITDA forecast after reaching full capacity), and the level of the world leader, Alrosa (production in 2015 – 38.3 million carats), – 4 EBITDA, Nikolai Sosnovsky, director of metallurgy and mining at Prosperity Capital Management, gave an example.
LUKOIL earned 48 billion rubles from the sale of AGD. pre-tax profit (38 billion rubles after), according to his statements for 2017. The fate of the “Opening Holding” was less successful. Three months after the closing of the transaction, its main asset, FC Otkritie Bank, took the Central Bank for reorganization. The Bank of Russia spent almost half a trillion rubles to close the hole in Otkritie, and Trust (at first it was healed by Otkritie itself) provided a deposit of 1.6 trillion rubles. On the basis of the latter, the regulator created a bank of non-core assets.
Prospects for the lawsuit
The key issue in the consideration of the case will be the market value of AGD at the time of the sale, says Dmitry Kletochkin, partner at Rustam Kurmaev & Partners. Most likely, the court will appoint an examination for evaluation, perhaps more than one, since the parties will dispute the reliability of the conclusions that do not meet their interests, the lawyer believes. It is impossible to say exactly what will be considered an acceptable deviation from the market price and what will not, Kletochkin continues: a 20% deviation is considered normal, a kind of “value determination error”. The Supreme Court has previously expressed the position that a deviation of up to 50% or more indicates abuse, notes Kletochkin: between 20 and 50% is a “grey zone” of court discretion.
more than 950 billion rubles.
constitute the requirements of the “Trust” to the “Opening Holding” – this is 95% of the register of creditors. This includes RUB 375 billion purchased from FC Otkritie at the end of December 2022 as part of a deal with VTB
The plaintiff will need to prove that at the time of the disputed transactions, Otkritie Holding met the signs of insolvency, they were committed to the detriment of creditors, and LUKOIL knew about such a goal, notes Ilya Dedkovsky, lawyer, head of the Bankruptcy practice at AB KIAP. It will be rather difficult to prove this set of circumstances, he believes, given that the transaction was financed by VTB – it is unlikely that the state bank would provide a loan to an insolvent person.
The manager does not ask to restore the positions of the parties in full, but only to recover the difference between the actual amount of loans issued and the real value of the rights of claim, says NSP partner Aram Grigoryan. If successful, LUKOIL will not regain control of the asset.