Nutritek

Assets

As of January, 2011 at three plants Baby, etc. turns out products under the Nutrilak brands, Winnie, Nural.

Performance Indicators

As of the beginning of 2010 the debt load of the company made about $220 million (among creditors Rosselkhozbank, Unicreditbank), financial performance of the company, despite repeated change of management, constantly worsened.

Revenue of Nutritek for January-April, 2010 made only $23.771 million instead of the planned $38.17 million, and EBITDA turned out negative — $1.085 million though it was planned in the amount of $5.435 million.

History

The Nutritek company is founded in 1990 by Georgy Sazhinov.

2005: Malofeyev's arrival

In 2005 the company Marshall Capital, Konstantina of Malofeyev became the co-owner of Nutritek. The Nutritek holding (the producer of milk and baby food) was one of clients of MDM with whom it worked. As the businessman told the Forbes magazine (and confirmed to Vedomosti), the founder and the owner of Nutritek Georgy Sazhinov tried to obtain in MDM a business development loan under 10% of stocks, but the bank refused. Then Malofeyev himself took for Sazhinov the credit in Uralsib and received for it 10% of parent company of Nutritek — Nutrinvestholding. And in 2005 the founded Marshall Capital Partners and Sazhinov the Marshall Milk Investment fund purchased 100% of Nutrinvestholding.

Since this moment the company very actively raised funds for business development, using all possible tools — from bond issue to an asset sale in newly created funds.

2007: IPO and asset sale to Russagroprom

In April, 2007 Nutritek carried out the IPO, having placed shares for the amount of $199 million from which about $110 million came to the company.

In the summer of the same year the London Private Equity Fund UBS acquainted Malofeyev and Sazhin with large western investors of AXA Private Equity and Paul Capital Partners, tells the source close to the management of UBS. For these companies two private equity funds of MarCap I and MarCap II in which new investors invested $420 million were created, and Marshall Capital sold to MarCap I a part of the assets (Nutritek). In general in three years more than $1.1 billion were attracted.

Russagroprom was created in the same 2007 by the former Deputy Minister of Agriculture of the Russian Federation Vladimir Alginin and natives of Wimm-Bill-Dann company. In November, 2007 the company provided an investment program, very ambitious for the newbie in the market: Russagroprom decided to purchase 250 thousand hectares of arable lands, to create a livestock complex on 50 thousand cows. Russagroprom estimated the power of the dairy farms at one thousand tons per day.

In a month it became clear how the company intends to become so big - Russagroprom decided to purchase from Nutritek six dairy assets - in the Vologda, Penza, Belgorod regions, Krasnoyarsk and Altai Krai and also in Tatarstan. Transaction amount was 350 million dollars, but at once Nutritek received only 250 - shareholders of Nutritek could receive other 100 million then in the form of the option, and could redeem a part of assets back.

In 2007 Marshall Capital was a major shareholder of Nuritek. According to Malofeyev, the fund had no share in Russagroprom, but in VTB consider that the companies were all the same connected - correspondence of managers allegedly testifies to it. Later in 2011 the High Court of Justice also asked VTB to be engaged in this correspondence.

Here also the first of the main participants of future case - VTB appeared. He granted to Russagroprom the loan for implementation of the transaction - the speech, according to different data, goes about 225-230 million dollars. As a deposit the bank received shares of those milk plants which the auditor Ernst&Young estimated at 9.2 billion rubles (data of Kommersant) are nearly 300 million dollars at a current rate.

Thus, VTB should not have remained for nothing anyway: if Russagroprom paid the credit, the bank drew interest if did not pay, then - the dairy plants which stand more, than a credit amount. However it turned out that the agreement with Russagroprom yielded to VTB enormous losses alone.

2008: A default on bonds of Nutritek

And then there came crisis.

In 2008 Russagroprom ceased to pay on the credit of VTB. The State Bank took legal action with the requirement about collecting assets. This claim was satisfied, but it turned out that the assets which are on balance of Russagroprom stand much less - about 40 million dollars. "Izvestia" wrote that all on balance of Russagroprom there were assets of 6.3 billion rubles at obligations to creditors on 11 billion.

When VTB understood what could not be taken from Russagroprom, it came on the other hand. In financial institution found out that owners of Nutritek and Russagroprom can be connected among themselves. Besides, in VTB assumed that two companies worked together and initially wanted to obtain only the credit - but not to give it back in any way.

The Nutritek company carried out delisting. At the end of 2008 Nutritek allowed the first default on repayment of eurobonds for $50 million.

On a special purpose consolidated balance of group on IFRS for December 31, 2008 obligations of group were more assets of 1.76 billion rubles.

2009: With a chipped washing-tub

In the spring of 2009 the company was already not able to pay even the coupon according to ruble bonds — an equivalent about $1 million.

At the end of 2009 the Board of Directors ordered Ernst&Young the special audit of the company which showed the true situation in it. Told several sources familiar with the report about the content of check: auditors detected shadow receivables of the Nutritek group on 2.6 billion rubles — debts of 11 firms, part of them was controlled by top managers Sazhinov and Oleg Ochinsky. Also it was specified in the report of Ernst & Young that in 2006-2009 Nutritek listed to offshore DRD Group (did not enter into group) 1.8 billion rubles from which through a chain of offshores to Nutritek only 929 million rubles DRD Group returned it was used also for payment of "an unofficial part of salaries and bonuses" to the staff of Nutritek. Auditors could not find over $30 million. And it is about a half of EBITDA of Nutritek in 2007, the analyst of Daiwa Capital Markets Vitaly Baikin notes.

The former managers of Nutritek told Ernst & Young that several technical companies carried out colourable transactions to increase revenue of Nutritek. Ernst & Young notes in the report that the company could provide documents only on 47% of the transactions which interested the auditor: according to employees of group, a part of documents was gone in result of road accident and fire in a warehouse. According to sources, the report of Ernst & Young was discussed on Board of Directors of Nutritek, its contents is known to creditors and investors of Nutritek. Malofeyev and the representative of Ernst & Young refused to comment on the report, Ochinsky assures that he is not familiar with his contents and "was not a beneficiary of the legal entities having shadow receivables before the Nutritek group and firms through which money of group was carried out".

2010: Sazhinov leaves the company

In June, 2010 Malofeyev said to Vedomosti that investigation of Ernst & Young showed that "Oleg [Ochinsky's] reputation is rather protected to return it to the company". It was not succeeded to contact Sazhinov. According to the results of investigations he stopped being the shareholder. Konstantin Malofeyev said that the founder of Nutritek Georgy Sazhinov leaves the company, and 19% of stocks belonging to it are transferred to Nutritek with the subsequent possible sale to the strategic investor.

In the middle of the 2000th years the fund invested in many Russian assets, but by the end of decade switched generally to telecommunications, first of all Rostelecom. Malofeyev's methods at participants of the market of special enthusiasm were not called, and the former CEO of Svyazinvest Evgeny Yurchenko hinted the press that he considers the businessman the raider (afterwards Malofeyev had even legal proceedings with media for these hints).

2011: Malofeyev leaves Nutritek

In January, 2011 it became known that Marshall Capital companies of Konstantin Malofeyev, the board member of Svyazinvest state holding and the co-owner of joint Rostelecom, it was succeeded to get rid of a troubled asset — once the largest Russian producer of baby food of the Nutritek group. As Kommersant knew, within a month the company will close the transaction on transfer of 75% of Nutritek to its founder Georgy Sazhinov which in 2010 left this business. Mister Sazhinov will give a share in developer Marshall Estate to exchange.

That Marshall Capital leaves business of Nutritek Kommersant was told by the managing director of fund Sergey Azatyan. According to him, in December, 2010 Georgy Sazhinov addressed fund with the offer to transfer it 75% minus one stock of the company in exchange for its packet in Marshall Estate companies (more than 22 thousand hectares of the earth in the Moscow region, a number of developer projects, including the science city Ecopolice in the resort of Tsar-Grad manage, is engaged in cottage construction), in which control already belongs to Marshall Capital. "We as a result of the transaction will bring our packet in Marshall Estate approximately to 90%. We expect to close the transaction within a month" — mister Azatyan says. The transaction, he claims, will be cashless.

At the end of 2010 in the course of discussion of the transaction on an exit from among owners of Marshall Capital company at Nutritek the CEO was replaced. As Oleg Ochinsky who headed the company in the spring of 2010 told Kommersant, he voluntarily resigned on January 1, 2011. "I stated the leaving reasons to Board of Directors of Nutritek, and they accepted my resignation" — the ex-CEO told. Sergey Azatyan noted that leaving of mister Ochinsky is connected with the future change of the owner of the company. "Oleg offered the business plan on an output of the company from crisis thanks to which it managed to avoid bankruptcy, to agree with creditors about debt restructuring and to make profit by the end of 2010" — mister Azatyan said. The head of Nutritek was Ilya Toshchenko who already worked in this position several months during 2009 (at different times worked also in the companies Danone and Mars).

In the middle of 2011 the High Court of Justice arrested assets of Marshall Capital in Great Britain, by the end of the year nevertheless decided that to deal with the companies conducting activity in Russia and with assets in Russia costs in Russia.

VTB was not given also after failure in the British court. According to Kommersant, criminal case in Russia was opened in November, 2011, but active actions on it began only in a year.

2012: Searches in Provotorov and Malofeyev's houses

In 2012, in four years after Russagroprom ceased to pay VTB, he was declared bankrupt.

At the beginning of November, 2012 the CEO of Russagroprom Evgenia Kremneva who, according to the investigation, and provided to the auditor the documents testimonial of high cost of the assets bought from Nutritek was in absentia arrested. And on November 20, 2012 case reached also searches at Konstantin Malofeyev.

On November 20, 2012 it became known that in the matter of Nutritek also Dmitry Skuratov, the son of the former Attorney-General Yury Skuratov will be interrogated. According to the last, his son really worked as the lawyer in structures of Marshall Capital, but was not in fund the key manager.

What Alexander Provotorov's fault consists in, it is still unknown. He came to Rostelecom from Marshall Capital in 2010 and, thus, could take active part in the transaction with assets of Nutritek. However as yet in Investigative Committee of nothing declared officially, and the surname of Provotorov was not involved in case earlier, in the press conspiracy theories began to appear.

Main of them is that searches at Provotorov can force him to resignation from the presidency of Rostelecom. According to Vedomosti, in September, 2012 the Ministry of Telecom and Mass Communications suggested to appoint to its place the CEO of Svyazinvest Vadim Semyonov (who is characterized by media only as "Dmitry Medvedev's classmate"), but against acted in Presidential Administration. Vedomosti gives as an additional argument also what rumors about Provotorov's resignation coincided with another matter concerning Rostelecom - on October 2, 2012 at office of the company carried out searches within criminal case about plunder by managers of state apartments.

Time for new searches was selected extremely successfully too - first, on November 21 Rostelecom should provide the report for the third quarter, and was planned that Provotorov will participate in an action. Rostelecom said that the press briefing with the top manager is postponed to later date.

Secondly, on the eve of Konstantin Malofeyev's searches withdrew from elections deputies of the Znamensk Village Council in the Smolensk region. Using these elections Malofeyev wanted to become, according to Izvestia, a senator, but in local court decided that it bribed voters. Thus, Malofeyev lost an opportunity to receive senatorial inviolability.