Page 7 - FSUOGM Week 01 2021

FSUOGM COMMENTARY FSUOGM

According to public information, CJSC MIRA- amount included in the contract. The real cost
CLE borrowed RUB73bn ($2.4bn at the time), of the deal to Shamalov was the assumption of
meaning Themis Holdings Ltd. borrowed his share of the holding company’s debt which
c.RUB77bn for the purchase of 50% of Sibur. was almost $200mn as well as agreeing to forego
Sibur’s valuation at the time was also estimated the offer of several million dollars under the
to be around RUB150bn (c. $5bn), according to terms of the previous Gazprombank incentive
Gazprombank. programme.
With the new shareholder came a new incen- In an interview to a Moscow-based radio
tive programme for top management that was station Konov said that under that same pro-
launched in 2010. Around two dozen top man- gramme he purchased his stake in Sibur for c.
agers were invited to participate in it under the $85-$100. He also said that the incentive pro-
following conditions: top-managers had to forego gramme details are disclosed in the company’s
the remuneration they were due under the Gaz- reporting for 2010-2013.
prombank incentive programme; and upon Since 2013, the management who opted
achieving new KPIs they would have a right to for the new deal have been using their divi-
purchase a stake in Themis Holdings Ltd., includ- dends payments to pay off this debt. And as bne
ing assuming all the debts of the company in pro- IntelliNews has reported the company has been
portion to the stake they would receive. paying record high dividends in the last year. As
Some of the managers, fearing the uncertainty part of its disclosure to bond investors and cred-
that always accompanies shareholder change, itors, Sibur has released the details of all these
preferred to opt out and take their money from debts and payments on its corporate website.
the previous incentive programme, which came Shamalov holds these shares that he received via
in as tens of millions of dollars for some of them. the incentive programme to this day, according
Others, including Shamalov and the current to Sibur.
CEO Konov, went all in with the new deal. “The other group of managers had other deals
"In 2013, Kirill Shamalov bought a 3.8% stake on other terms, reached at other times, but they
under the terms of an agreement that was formed implied the purchase of Sibur shares directly,
for a group of Sibur managers back in 2010. Not while Kirill Shamalov and the first group of
only Kirill Shamalov, but also myself and several managers, including myself, was buying shares
other managers of the company participated in in Sibur’s holding company burdened by debt",
the incentive programme on the same terms. In explains Konov.
2013, I bought shares (of Sibur's holding com- “It is also incorrect to estimate the 3.8% stake
pany, which was also burdened with debts) on based on an approximate valuation of Sibur from
the same terms," said Konov earlier, when com- 2013, because the details and conditions of the
menting on the investigation. transaction were set and pre-determined at the
Mikhelson’s new incentive programme start of the incentive programme in 2010 based
matured in 2013 and the management’s perfor- on the 2010 valuation of Sibur,” Konov added.
mance against their KPIs was assessed. At the Shamalov’s presence on the board has dogged
end of the programme, the top managers, includ- the company ever since it was reported that he
ing Shamalov, now had the right to purchase a married Tikhonova, as part of the relentless
pre-determined stake in Themis Holdings that investigations into anything where Putin’s life
was part of the programme, assuming along with touches on business.
it company debts proportional to their stake. bne IntelliNews quizzed Konov about Sham-
Under the terms of the incentive programme alov’s role at the company during an exclusive
Shamalov was entitled to buy 38,000 shares in interview in December 2018. Konov expressed
Themis Holdings, which provided him with a some frustration with the brouhaha associated
beneficial ownership of a 3.8% stake in Sibur. with Shamalov, pointing out that he had been
But as part of that deal he also assumed working at the company for over a decade and
around $190mn of debts. At the same time, was a senior executive long before his marriage.
based on Gazprombank’s valuation of Sibur of “He was first running the government relations
RUB150bn, the real value of Shamalov’s stake department, as he came to Sibur from the gov-
at the time Mikhelson was buying Sibur would ernment, and later expanding his role to cover
have been c. RUB 5.7bn or c. $187mn. the legal and PR departments.” Konov quipped
The $100 comes into the story as this was that he has no idea if Shamalov was married to
not the amount that actually changed hands in Putin’s daughter but says he was not invited to
the share purchase deal, but was just a nominal any weddings.

Week 01 06•January•2021 www. NEWSBASE .com P7