The buyer of Megafon from Alisher Usmanov will not get the debts of Svyaznoy
The mobile electronics network has announced that it will go to court to declare itself bankrupt. At the same time, Megafon, a former shareholder of Svyaznoy, may be sold to Rostelecom. There is a feeling that all this was started in advance, at the beginning or in the middle of 2022. The telecommunications market is concentrated in the hands of the state and it clearly does not need a “living bankrupt”.
In 2022 alone, 79 claims were filed against Svyaznoy in the amount of more than 14 billion rubles. Vimpelcom demanded to recover 839 million rubles from the company, Merlion – 5.6 billion. Alfa-Bank demanded six billion, including due to overdue debt, but then announced that a settlement agreement had been reached. But Sovcombank, to which Svyaznoy owed much less – “only” 2.5 billion rubles – threatened the network in October 2022 with bankruptcy. In January 2023, Aviapark made the same statement. In December 2022 and January 2023, the Moscow Arbitration Court satisfied the claims of VimpelCom and Merlion, respectively.
On February 14, a statement on the debtor’s intention to independently initiate bankruptcy proceedings was published on the Federal Resource.
One of the investors of Svyaznoy, Megafon, which controlled 25% of the network, sold its stake in 2022, to whom it was not reported. In fairness, it should be noted that Svyaznoy, once considered the leader among retail chains of mobile electronics, did not come to the current state of affairs in one year. Moreover, this is not the first bankruptcy of the network.
In 1995, Russian billionaire Maxim Nogotkov created the Maxus electronics retail chain. He later renamed it “The Messenger”. In 2014, Nogotkov finds himself in a situation that is like a blueprint similar to the current situation of Svyaznoy. The entrepreneur owed 6 billion rubles to the ONEXIM group of Mikhail Prokhorov and 3 billion to the Blagosostoyanie NPF. Svyaznoy was now 90% owned by the new owners. Subsequently, Maxim Nogotkov lost the remaining 10% of the share according to a similar scenario.
Prokhorov needed Svyaznoy only as a return of a six billion dollar debt. In the same 2014, he sells an asset he does not need to Solvers Oleg Malis, who became the holder of a controlling stake. In 2017, MegaFon took a closer look at Svyaznoy. Oleg Malis and Alisher Usmanov (the largest shareholder of MegaFon and the owner of Euroset) agreed to merge Svyaznoy with Euroset.
MegaFon’s subsidiary, the Cypriot offshore Lefbord Investment Limited, received a 25% stake from this deal. As a result of this merger, the world’s largest retail chain in terms of the number of its own stores appeared in the high-tech segment. More than 30,000 sales assistants worked in 5,000 points of sale. The number of daily visitors exceeded 2 million people. Revenue from online sales of the combined company reached RUB 22 billion in 2017.
In 2021, the numbers have changed somewhat. The total revenue reached 105 billion with a net profit of 15 million rubles. At the same time, the number of outlets in 1.1 thousand Russian cities decreased to 2.6 thousand.
As Aleksey Kornev, an expert from the ACRA corporate ratings group, told Forbes, Svyaznoy has been teetering on the verge of profitability for a long time. Hence the increase in debt. The company was still able to make a profit for some time, but only by closing unprofitable outlets. Perhaps the network could even slowly begin to rise.
But the year 2022 has come. And with it – sanctions. First, electronics retailers had to switch from deferred payments to prepaid goods. And this requires additional working capital, with which Svyaznoy has already had serious problems due to the high debt load. Secondly, the number of clients gradually, but steadily, decreased.
FintechLab analyst Sergey Vilyanov named another reason for the failure of Svyaznoy. He believes that the company did not notice changes in sales technology. By itself, the sale of smartphones and accessories does not bring significant profit. This is understood by the major players in cellular communications. They began to develop their mono-brand retail chains more and more, which took a significant part of the advertising budgets of device and accessory suppliers from independent mobile retailers, which was Svyaznoy.
Despite the filing for bankruptcy, Svyaznoy continues to purchase goods, outlets are still working. It is quite understandable: until the debts were claimed, they were not declared bankrupt – why not continue to earn at least some money. And the bankruptcy procedure itself is not a matter of minutes.
Such bankruptcy cases sometimes last more than a decade, Daniil Naimushin, an arbitration manager and managing partner of One to One, told Forbes. The expert noted that according to the financial statements for 2021, the company’s assets amount to about 53 billion rubles, of which more than 32 billion are receivables. With such amounts, it is impossible to quickly conduct bankruptcy proceedings.
In addition, in the sector of corporate bankruptcies in relation to the debtor, it is very rare, but a recovery or external management procedure is introduced, which gives the company a chance to restore solvency. The brand can also be transferred to another owner. This is the initial hope of the Svyaznoy leadership, as we discussed above.
Well, MegaFon, which is 100% owned by Alisher Usmanov’s USM holding, as we have already said, can be sold to Rostelecom. If this deal goes through (most likely it will), then the state holding of mobile communications will become the undisputed leader in the telecommunications services market. Previously, the cellular operator Tele2 came under state control. Veon Holding intends to sell VimpelCom (Beeline) to top management, while, according to Kommersant, structures associated with the state may also become the ultimate owner of the operator.
