A1 and Alfa-Bank (Russia) Invest $ 200 Million in Russian CompaniesA1 and Alfa-Bank (Russia) have reached an agreement on the joint investment activities worth US$200 million. The capital will be used for investments in Russian assets demonstrating growth potential. Based on the target criteria, the investment portfolio should include approximately 10-15 projects. The total value of target assets may exceed the stated capital due to debt financing as well as investments of third parties.
‘The combination of the experience and capabilities of Alfa-Bank (Russia) and A1 will enable the creation of a highly relevant and effective investment mechanism. It is particularly important that the investments will be made in Russia and will be a logical follow-up to Alfa-Bank’s long-term successful activities with hundreds of domestic companies. In the current economic context, the combination of management and human resources with financial resources should help achieve the optimal result’, Alexey Marey, Chief Executive Officer of Alfa-Bank said.
The cooperation strategy is aimed at increasing shareholder value of companies possessing competitive advantages and potential for development in the current macroeconomic environment. A wide range of industries are considered for joint projects, some of the priority sectors include: agriculture, metals & mining, chemicals and petrochemicals, forestry, pharmaceuticals and FMCG. Investment criteria do not necessarily imply the control based on a majority although suggest that at least the blocking shareholder rights in joint investments are guaranteed.
‘A1 has successful experience in enhancing the value of its portfolio companies, achieving financial stability and transparency of companies, as well as improving the quality of their corporate governance. In the current market conditions, given limited access to capital of many Russian companies, the A1 and Alfa-Bank (Russia) co-investments will result in development of competitive companies and businesses strategically important for the Russian economy’, Alexander Vinokourov, President of A1 said.
Complementary competences of Alfa-Bank (Russia) and A1 will ensure efficiency of joint investments. Alfa-Bank (Russia) will be able to make a significant contribution in terms of access to financing of portfolio companies and unique sector-related expertise gained through more than 25 years of working in the Russian market. The unprecedented experience of A1 in financial turnarounds and implementation of operational improvements at portfolio companies is one of the key aspects to success of the joint initiative.
A1 is one of the leading players on the investment market in Russia and the CIS making equity investments in various industries, pursuing the interests of its shareholders, clients and partners. A1 focuses on investment projects of two types: special situations and growth strategies. Alfa-Bank (Russia), TNK, VimpelCom, Perekrestok and Rosvodokanal Group were originally A1 projects that later became strategic businesses for Alfa Group as well as core companies for the wider Russian economy. A1’s long-term interests are aimed at establishing strong and competitive businesses, producing modern and very high quality goods and services to satisfy Russia’s growing demand, and developing efficient organizational and management systems.