AGD Diamonds

Performance indicators

2022: Revenue reduction by 36% to RUR 18 billion

The revenue of the diamond mining company AGD Diamonds in 2022 decreased by 36% compared to 2021 - to 18 billion rubles from 28 billion. Net profit reached 8.1 billion rubles, while in 2021 there were net losses in the amount of 57.32 billion rubles. The company's statements were made public in early May 2023.

According to Interfax, citing materials from AGD Diamonds, the company's gross profit in 2022 amounted to 10.8 billion rubles (-39% by 2021), profit from sales - 8.86 billion rubles (-44%), cost - 7.22 billion rubles (-30%).

The revenue of the diamond mining company decreased to 18 billion rubles

The receipt of a loss at AGD Diamonds was associated with expenses in the amount of 80.45 billion rubles, which are mainly requirements for AGD Diamonds under a guarantee provided by the shareholder of Otkritie Industrial Investments LLC to the creditor bank.

The news agency notes that against the background of the introduction of new sanctions against the Russian Federation at the beginning of 2022, AGD Diamonds faced refusals from the supply of spare parts, equipment and equipment under both new and existing contracts, the explanations to the reports say. Alternative suppliers and contractors offered to conclude contracts at prices several times higher than the previous ones, and also demanded that prices be tied to world currencies. Due to logistical obstacles, delivery times have increased significantly. Mutual settlements with foreign counterparties in dollars and euros became impossible, pushing to search for new options for settlements under foreign trade contracts, as a result of which the timing of revenue generation significantly increased.

Citibank In February 2022, the correspondent bank blocked the advance payment of $86 thousand transferred to AGD Diamonds under the contract for the supply of a mobile enrichment plant, which was explained by the restrictive measures of foreign countries in relation to the bank through which the company made the payment.^[1]

History

2022: Mikhail Bakov - new CEO of AGD Diamonds

On December 22, 2022, it became known about the appointment of Mikhail Bakov as the new general director of the diamond mining company AGD Diamonds instead of Gennady Pivnya, who was its head for more than one year. Read more here.

2021: Bankruptcy proceedings launched

In mid-October 2021, it became known about the launch of the bankruptcy procedure of AGD Diamonds. The diamond miner owes tens of billions.

According to Kommersant, citing a determination by the Arbitration Court of the Arkhangelsk Region, the court recognized VTB's claims in the amount of 61.6 billion rubles of principal debt as justified and included them in the third stage of the register of creditors. Earlier, AGD Diamonds itself filed for bankruptcy, but the companies refused to accept the application.

Earlier, the Moscow Arbitration Court has already satisfied VTB's claim to recover $873 million from the owner of the diamond miner, Otkritie Industrial Investments (OPI), on a loan issued in 2017 to buy its shares from Lukoil.

The bankruptcy procedure of the diamond miner AGD Diamonds has been launched

According to the materials of the case, which is being considered by the court by October 2021, due to the fact that the OPI did not fulfill its loan obligations, the bank used an independent guarantee mechanism, under which it demanded $964.4 million. The payment date was set for March 16, 2021, but AGD Diamonds was able to pay only $120 million. So the debt remained in the amount of $844.4 million.

VTB told the newspaper that the bankruptcy procedure was initiated solely to protect the interests of the bank as a lender "from the threat of revising the transaction to acquire the company's shares in accordance with the FAS statement of claim." In 2020, the antimonopoly department appealed to the court in order to expand the 2017 deal. Three years after the transaction, the FAS decided that the buyer hid the citizenship data of its shareholders, and its price was overstated.

Lawyers interviewed by Kommersant believe that the true reasons for the bankruptcy of AGD Diamonds initiated by VTB are different. Thus, Alexey Kostovarov, partner of the Liniya Prava law firm, believes that VTB fears that they may lose security on the issued loan for the purchase of AGD Diamonds if the sale of the diamond miner's shares is invalidated, but this issue is not resolved through bankruptcy of the company.

According to Alexander Bolomatov, partner of the law firm YUST, most likely we are talking about VTB's desire to gain control of the company through bankruptcy proceedings.^[2]

Notes