LetterOne Holding S.A.

LetterOne Holdings S.A. - the company was founded in 2013 in the Principality of Luxembourg. The area of ​ ​ activity is directed investments in power, technology, precious metals and enterprises based on private equity capital. The amount of assets as of December 31, 2014 is about $25 billion (company data).

Performance indicators

2022: Record loss - $7.85 billion

At the end of 2022, Mikhail Fridman's LetterOne holding showed record net losses of $7.85 billion. A year earlier, net profit was recorded at $4.56 billion. Such data are provided in the financial report published on August 24, 2023.

In 2022, LetterOne faced a sharp decline in the value of key assets. In particular, due to the revaluation of the value, the share in the German oil and gas company Wintershall Dea decreased on an annualized basis by $2.33 billion. Losses in the private equity segment are estimated at $2.47 billion. Losses of $35 million were recorded in the direction of new energy sources.

Mikhail Fridman

There is no doubt that 2022 was an extraordinary year for the global energy industry. Manufacturers and suppliers, as well as industrial and retail consumers, have faced a rapidly changing and unpredictable environment. Combined with an uncertain political situation and a volatile macroeconomic environment, this has led to many profound changes from both supply and energy demand, the LetterOne report said.

In general, the value of net assets of LetterOne in 2022 amounted to $18.65 billion. For comparison: a year earlier, this value was $26.78 billion. Thus, the fall was at around 30.4%. At the same time, the report emphasizes that the amount of assets of the Turkish mobile operator Turkcell on an annualized basis rose from $592 million to $723 million. Since the creation of the LetterOne fund in 2013, the total value of its assets has fallen below $20 billion for the first time. The maximum value was registered precisely at the end of 2013 - $30.62 billion. That is, in the period 2013-2022. the value of assets decreased by about 40%.^[1]

History

2024: British court reveals details of Khan and Kuzmichev's exit from LetterOne

At the end of November 2024, the High Court of England and Wales announced the details of the deal providing for the withdrawal of businessmen German Khan and Alexei Kuzmichev from the Luxembourg investment company LetterOne Group. They reportedly sold their shares to partner Andrei Kosogov on the basis of an "oral agreement."

It is said that Khan and Kuzmichev lent Kosogov more than $7 billion to buy out their own shares in LetterOne. The corresponding agreement was reached during a telephone conversation when Kosogov was resting in the Maldives. The deal involves the possibility of a 10-year share buyback. These details were revealed during the consideration of the dispute over the forced sale by the British authorities of the local Internet provider Upp Corporation Ltd, which was previously owned by LetterOne.

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Bloomberg

The sale of Khan and Kuzmichev's shares followed an oral agreement reached during phone calls, during which Kosogov was in the Maldives and engaged in his own affairs. Khan and Kuzmichev lent Kosogov funds to buy their shares (at a price of more than $4 billion and $3 billion, respectively) with an agreement that they can redeem their shares within 10 years, the disclosed documentation says.

The court materials note that on February 24, 2022, the day a special military operation began, LetterOne paid dividends to companies owned by Khan, Kuzmichev and another co-owner of the group, Peter Aven. Kosogov, who is a longtime partner of former Alfa Group owners Mikhail Fridman, Aven, Khan and Kuzmichev, acquired their stakes in various projects. Such assets, in particular, included the shares of Friedman and Aven in Alfa Bank. Kosogov is the only partner who has not been sanctioned.^[2]

2023

Hiring the former head of the Ministry of Justice of Britain

On October 25, 2023, LetterOneMikhail Fridman announced that Brandon Lewis, the former head of the British Ministry of Justice, had been appointed to the post of head of its advisory board under the chairman. At the new post, he will receive £250 thousand (approximately $312 thousand at the exchange rate as of November 20, 2023) per year for an eight-hour working week. Read more here.

Sale of Upp at the request of the British authorities

On September 6, 2023, the British telecommunications company Virgin Media O2 announced the conclusion of an agreement to acquire local Internet provider Upp from the international investment group LetterOne, associated with Russian businessmen Mikhail Fridman and Peter Aven. Read more here.

Sale of DIA stores

On August 3, 2023, the French group Auchan announced an agreement to acquire 489 stores of the Spanish retailer Distribuidora Internacional de Alimentacion SA (DIA) in Portugal. Read more here.

Buying a stake in Emma Healthcare Holdings

Investment holding LetterOne, affiliated with Mikhail Fridman and Peter Aven, buys from British partner Blantyre Capital a stake in Emma Healthcare Holdings, which owns two European pharmaceutical assets. As it became known in early February 2023, LetterOne becomes the sole owner of Remedica and Sun Wave Pharma. Read more here.

2022

Lawsuit against Pamplona Capital Management, the fund's $5 billion asset manager

In July 2022, the LetterOne fund of Mikhail Fridman and his partners filed a lawsuit against the investment company Pamplona Capital Management, which manages the fund's assets for $5 billion. The company, founded by Friedman's former partner Alex Knaster, previously announced plans to sever any ties with "Russian capital."

Friedman's departure from the board of directors

On March 4, 2022, it became known that Mikhail Fridman resigned from the board of directors of the investment company LetterOne Holding S.A. after the European Union imposed sanctions on the entrepreneur.

London-based LetterOne said in a press release that Friedman and Petr Aven had resigned from the company's board and would no longer have any business with the group. Friedman and Aven jointly own a 50% stake in LetterOne, so the company avoided the sanctions imposed on the two people.

Friedman resigned from LetterOne's board of directors. He was denied access to offices and documents

Board Chairman Mervyn Davis, who has now taken control of LetterOne, said employees were prohibited from interacting with Friedman. LetterOne, also stopped letting Friedman into its offices and blocked him from accessing documents, Davis said in an interview with reporters.

Friedman's assets in the company were "effectively frozen" and his rights as a shareholder were taken away, LetterOne said in a press release. It will not receive dividends, funds or any connection, LetterOne said.

A spokesman said Friedman was no longer "involved in LetterOne's day-to-day management or decision-making and appropriate action was taken to do so."

LetterOne's action comes after the EU imposed sanctions on Friedman as part of a package of retaliatory measures against a special operation being carried out by Russia in Ukraine.

According to a press release from LetterOne, the board is not required to return Friedman's shareholder rights even if EU sanctions are lifted. The agency Bloomberg estimates Mikhail Fridman's fortune at $10 billion, and LetterOne's assets are estimated at tens of billions. dollars

Purchase of assets of pharmaceutical holding Ascendis Health

On February 1, 2022, it became known about the sale of the assets of the South African pharmaceutical holding Ascendis Health to LetterOne Mikhail Fridman and Blantyre Capital. The deal is concluded as part of the recapitalization of the pharmaceutical company, which is mired in debt. Read more here.

2021

Investing in plastic recycling company Plastic Energy

In early November 2021, Plastic Energy, which calls itself one of the leaders in the field of chemical processing, completed an investment of €145 million from three separate investors: Axens, M&G and LetterOne (an investment group controlled by Russian billionaire Mikhail Fridman). Morgan Stanley acted as a financial adviser as part of the deal. Read more here.

Investing in UK telecom company Upp

In early June 2021, LetterOne, an investment group controlled by Russian billionaire Mikhail Fridman, became a financial partner of British telecom company Upp worth $1.4 billion. In particular, LetterOne has agreed to fund the deployment of a 1m premises fibre network in England by 2025. Read more here.

Sale to AltitudeOne Aviation

In May 2021, it became known that LetterOne sold the leasing company AltitudeOne Aviation, in which, together with partners, it was going to invest $250 million. Due to the COVID-19 coronavirus pandemic and falling traffic, it has written off almost all investments in this project.

Completion of the investigation into the head of LetterOne in the case of the collapse of Dia quotations

In mid-January 2021, the Supreme Court of Spain put an end to the case of the collapse of the quotes of the Spanish supermarket chain Dia, bought by Mikhail Fridman. Read more here.

2020

Sale of 5% stake in Turkcell

On November 10, 2020, it became known about the sale of billionaire Mikhail Fridman, owned by IMTIS Holding S.A.R.L. (part of the investment company LetterOne Alfa Group), 5% of Turkcell shares . Read more here.

Production of 24.8% in Turkcell

On June 17, 2020, LetterOne announced an increase in its stake in Turkcell to 24.8%. Read more here.

Sale of stake in Uber

On June 8, 2020, it became known about the withdrawal of LetterOne from Uber's capital. Mikhail Fridman's investment company in February sold its stake in the taxi ordering service for $173 million, while three years earlier it invested $200 million in the startup.

The sale of a share in Uber owned by LetterOne was reported by RBC with reference to the holding's financial report for 2019. Who bought this share is not specified, nor is the reason for the sale. The founder of the analytical platform Dsight Arseny Dabbach believes that LetterOne left Uber's capital because it no longer sees an opportunity to make money on a startup.

Mikhail Fridman sold his stake in Uber. She made a loss

Many who invested in Uber in recent years ahead of the IPO hoped to earn at least twice as much in the next three years. However, the situation with Uber was not very successful, and, most likely, the company decided to sell its stake in order to invest the funds received more profitably, "said Arseny Dabbach, founder of the Dsight analytical platform.

By June 8, 2020, Uber's market capitalization is $62.91 billion (data from the New York Stock Exchange). According to RBC estimates, LetterOne could receive less than 3% of the company in an investment transaction, which became known in February 2016. At the same time, when exactly the holding invested in the American company and what share it received was not reported.

According to Bloomberg, the largest shareholders of Uber by June 8, 2020 Softbank (12.8%) and Benchmark Capital (8.66%).^[3]

LetterOne is not the first structure with Russian roots to invest in Uber. The venture capital company Caspian VC Partners of the head of the group's board of directors "Amount" Ziyavudina Magomedova began its activities with the purchase of Uber assets. The holding USM Alisher Usmanova and its partners have invested several tens of millions in Uber. dollars

2019

Spanish court launches probe into wilful Dia share cut before purchase

In October 2019, a judge of the National Court of Spain began an investigation into another lawsuit against the shareholder of the Alfa Group consortium Mikhail Fridman and LetterOne in connection with the purchase of product retailer Dia.

The judge sent a formal letter to the National Securities Market Commission (CNMV) to appoint experts. The lawsuit against Friedman alleges that he allegedly intentionally sought Dia's stock to fall to buy it at a lower price.

70% acquisition at Spanish retailer Dia

In May 2019, it became known that Mikhail Fridman's LetterOne managed to gain control over almost 70% of the capital of the Dia grocery retailer. The company is going to become its sole owner. Read more here.

Wintershall DEA education

In April 2019, it was announced that the German company Wintershall (a subsidiary of the BASF concern) and the company DEA (Deutsche Erdoel AG) Mikhail Fridman completed the merger procedure. As a result, Wintershall DEA, as announced, became the largest independent gas and oil producer in Europe.

As a result of the transaction, BASF, the owner of Wintershall, received 67% of Wintershall DEA, and LetterOne Fridman, German Khan and Alexei Kuzmichev, who controlled the DEA, - the remaining 33%. See Wintershall DEA for details.

2016

$50 million investment in free mobile operator FreedomPop

In August 2018, it became known that the LetterOne investment fund, owned by Russian billionaire Mikhail Fridman, invested $50 million in the American telecom startup FreedomPop. The startup provides mobile communications and wireless Internet services to more than 100 thousand users, and its customers receive a basic package of calls, messages and Internet traffic for free. According to the Financial Times, FreedomPop is going to spend the funds received to promote^[4] on the international market^[5].

According to FreedomPop CEO Stephen Stokols, the investment from LetterOne will allow the startup to win markets in about eight to ten countries within a year. Stokols emphasizes that his company received other lucrative offers, but settled on cooperation with LetterOne, as the most promising option. The startup hopes to increase the pace of development and enter the top ten world providers in the next five to ten years.

Plan for a $3 billion investment in health care and the creation of the L1 Health company

On June 6, 2016, LetterOne announced plans to invest up to $3 billion in healthcare. For these purposes, a new company was created, called L1 Health. Read more here.

Notes