How sons of Vladimir Kogan rule the fatherly empire

At the 57th year of life, businessman Vladimir Kogan died. His sons Eugene and Efim had to take over the management of a family empire worth $ 750 million a year ago.
21.06.2019
Forbes
Origin source
On June 20, at the 57th year of life, the owner of the Uralsib Bank and the member of the Forbes list Vladimir Kogan died. About a year ago, his health condition forced him to retire. During the life of Kogan, Forbes prepared a material on what was happening with his business in his absence. We publish this text without changes - so it will be released in the July issue of Forbes.

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A young man in a yellow vest, a helmet and a shovel in his hands stood against the Swiss Alps and told two local reporters that he wanted to build a tourist village worth 650 million francs near the Crans-Montana resort. But reporters were interested in his relationship with the Kremlin. “I saw President of Russia Vladimir Putin only on TV. I have no personal contact with him, ”the guy wondered. In the summer of 2014, Yevgeny Kogan was 25 years old.

The interest of the Swiss press is understandable. The father of a young developer Vladimir Kogan in the 1990s was the most influential banker in St. Petersburg. He headed the largest Promstroibank in the city and was well acquainted with Petersburgers who occupy key posts in the country today. Having received Uralsib for reorganization in 2015, Kogan said that he plans to leave the bank to the children. A year ago, his sons Eugene and Efim (he is three years younger) had to take control of the family empire worth $ 750 million ahead of time. In the spring of 2018, Vladimir Kogan suffered a stroke.

Recently, the Kogan family lost one of its largest assets - the Afipsky Refinery. How did this happen and what happens to other assets of a businessman?

The return of the banker

A couple of years before the reorganization of Uralsib, billionaire Nikolai Tsvetkov gathered top managers of his bank in the mountains of Italy. Bankers had to develop a further strategy. They wrote their vision on pieces of paper, laid them on the snow, stood barefoot on them and waited for answers from space. It did not help: according to IFRS for 2014, FC Uralsib increased the loss from 1.66 billion to 9.5 billion rubles.

For Tsvetkov, the bank was not only a business - with his help he wanted to make people's lives better. He increasingly immersed himself and managers in Ayurvedic practices and numerology, donated huge sums to charity. As a result, at the end of 2014, Tsvetkov had to urgently look for an investor who could capitalize the bank - otherwise he could be left without a license.
The negotiations with the main shareholder of the Moscow Credit Bank (ICD), Roman Avdeev, went further. He was ready to buy 75% of Uralsib for a symbolic ruble and replenish capital by 15 billion rubles, but the deal fell through. At the same time, Vladimir Kogan, who at that time was a co-owner of a small St. Petersburg BFA Bank, became interested in the bank. Tsvetkov and he offered to capitalize the bank. But Kogan waited on November 2, when the Central Bank, disillusioned with Tsvetkov's ability to independently find an investor, announced an auction for the reorganization of Uralsib. For the first time in the history of the Central Bank decided to entrust the reorganization of the bank to a private person. “Kogan’s proposal was the“ cheapest ”in terms of the tasks to be solved,” later explained Deputy Chairman of the Central Bank Mikhail Sukhov.

To save Uralsib, the Central Bank provided Kogan with 81 billion rubles (for example, Sistema's closest competitor asked for 100 billion rubles at auction). Kogan received 82% of the entire Uralsib financial corporation, which included many satellites, for example, a leasing and insurance company and a pension fund. Tsvetkov retained a 15% stake in the corporation. The decision to leave Tsvetkov among the shareholders of Uralsib Kogan in one of the interviews called “good will.”

The victory of a non-public businessman Kogan at an auction for Uralsib with assets of almost 400 billion rubles came as a complete surprise. Why did he need a large bank? His longtime acquaintance, a banker from St. Petersburg, explains this by his desire to return to the big game. Back in the 1990s, Kogan was called “the Great” in St. Petersburg, and in 2001 he was offered the post of Chairman of the Central Bank. But in the mid-2000s, Kogan sold off most of his assets, including PSB (VTB paid $ 577 million for him), and began working for the state. Returning to the business in 2011, he immediately began to look for a large asset for himself. Banks Vozrozhdenie, St. Petersburg, Svyaz-Bank and Baltinvestbank - this is an incomplete list of assets that Kogan has been eyeing, according to his friend. He even thought whether to buy Uralkali and Polyus Gold from Suleiman Kerimov. “Kogan always felt that he was a big capitalist and was looking for a form for this sensation,” explains the St. Petersburg financier.

However, Kogan had a major asset - the company Neftegazindustriya, which owned the Afipsky refinery, built in the 1960s in the Krasnodar Territory. Kogan’s partners in this business were Yuri Krymsky and Airat Iskhakov. Krymsky recalls that it was they who advised Kogan to buy Uralsib and introduced him to Tsvetkov. Since the 1990s, Kogan’s partners have worked with Bashkir refineries on a give-and-take basis. “Uralsib” before buying it Tsvetkov in 2003 was the main bank of Bashkiria, and Iskhakov and Krymsky were familiar with his leadership.

From darkness to light

In early 2010, the Afipsky refinery was not in the best shape. In the summer of 2009, Transneft satisfied only half of the refineries for oil supply, the capacities were idle, people were cut. The plant then belonged to the "Basic Element" Oleg Deripaska. During the crisis, the billionaire parted with the dream of becoming a major oil worker, returned Russneft to Mikhail Gutseriev, and now he was looking for buyers for refineries. In the spring of 2010, Yuri Krymsky and Airat Iskhakov purchased it for $ 320 million, $ 210 million buyers borrowed from Sberbank, the remaining $ 110 million, according to Krymsky, Kogan invested. Krymsky knew Kogan from the 1990s and invited him into the project with regard to his political connections. Kogan himself headed the construction department of the Ministry of Regional Development at that time and was responsible for the construction in St. Petersburg of a complex of flood defenses, which was informally called the “Putin dam”. He left the Ministry of Regional Development only in 2011. Krymsky recalls that in 2010, Kogan had already completed “business in St. Petersburg” and moved to Moscow. Through a chain of Cypriot companies and a trust in Liechtenstein, he received 57.6% of Neftegazindustrii, which owned 100% of the Afipsky refinery. Kogan did not intervene in the affairs of the plant, the management was completely on the minority shareholders, the Crimean and Iskhakov.

The emergence of new owners went to the Afipsky refinery benefit. Oil arrived there by rail and through the Transneft oil pipeline. For several years, Deripaska has unsuccessfully tried to completely switch the plant to the pipeline system. Neftegazindustriya did it by 2013. There was another problem. About half of the plant’s output was fuel oil - more than the industry average. Its exports brought a good income: the Afipsky Oil Refinery is located just 100 km from the Black Sea and transshipment points. Krymsky says that the $ 110 million that Kogan invested came back a year later. But in the future the situation should have changed. The state planned for 2015 a tax maneuver in the oil industry, one of its components was the increase in duties on fuel oil. The duties on light oil products, on the contrary, decreased, but in order to increase their output, the plant needed to be modernized.
 
By 2015, the first stage of modernization was completed. The plant's capacity has almost tripled, to 6 million tons, and debt, to $ 1 billion (almost the entire amount was provided by Sberbank, part of its liabilities in foreign currency). But the introduction of plants that could increase the depth of processing was ahead, and the plant had already felt the tax maneuver and the fall in oil prices. In 2014, the Afipsky Refinery's margin (3200 rubles per ton) was higher than the industry average, in 2015–2016 it was equal to the industry average, which itself decreased from 2500 rubles to 900 rubles per ton of oil in those two years, the main VYGON Consulting economist Sergey Yezhov.

Due to the tax maneuver EBITDA of the Afipsky Refinery collapsed from $ 400 million to $ 200 million. The modernization was in full swing, but it was necessary to negotiate a loan restructuring with Sberbank. This was taken up by Kogan, personally acquainted with German Gref. Having penetrated into the situation at the plant, at the end of 2015, he suggested that Crimean and Iskhakov retire from management. “Prior to this, the minority shareholders dragged the plant on their hump,” explains one of the Afipsky refinery’s contractors. “When the margin decreased, Kogan began to deal with financial flows, ask questions, he was somehow uncomfortable answered - and it started.” Krymsky links the conflict with Kogan to the purchase of Uralsib: having entered a major banking league, he believes, the senior partner has changed dramatically.

Kogan also demanded that Krymsky and Iskhakov transfer to the Neftegazindustrii group the two companies Neftegazindustriya-invest (NGI-invest), which they owned. It was a supplier to the refinery, in fact, it accumulated the main revenue from the trade in petroleum products. According to SPARK, in 2015, NGI-Invest's revenue amounted to 98 billion rubles (from Neftegazindustrii, which was also a supplier, 53.4 billion rubles, from Afipsky refinery, only 6.5 billion rubles).

Krymsky suggests that Kogan wanted to improve the financial performance of the group with the help of NGI-Invest and agree with Sberbank on new loans for further modernization. The businessman claims that Kogan allegedly threatened to start a war if his demands were not met. Acquaintances describe Kogan as a tough and authoritarian businessman who went through more than one corporate war. In the summer of 2016, the owner of NGI-Invest was Lakescope, through which the partners owned Neftegazindustriya. And Evgeni and Efim Kogany took over the management of the Afipsky refinery. They entered the leadership of "Uralsib".

Younger generation

In January 2019, the entrance to the glass factory located in the village of Krasnogvardeisky of the Stavropol Territory was blocked by a group of strong men - about seventy people in tracksuits. Workers at the enterprise were not allowed. Two months later, the work of the plant belonging to the company “Yugros-product” was completely frozen. “Yugros-product” is one of the largest problem debtors of “Uralsib” with the volume of claims of about 6 billion rubles (this amount is confirmed by the founder and head of the plant Alexey Yashkunov). Problems with the service of the loan began in 2008.
 
Just a month before reorganization, at the end of 2015, Uralsib transferred claims on the loan to Aquamarine, which filed this debt during the bankruptcy of the Yugros Product. Nevertheless, Yevgeny Kogan came to meet with the management of the plant. “He seemed to me a business man, he personally asked me to make maximum efforts to restart the plant, which we did,” recalls Yashkunov. He told Forbes that representatives of the bank regularly came to the meetings of creditors. But partnerships with the bank did not work out, according to Yashkunov, during the seizure of the plant, along with employees of the local private security company, there were representatives of Uralsib. At a Forbes official request, the bank responded that they were not related to the Aquamarine company. The plant eventually stopped in the so-called cold way. “The glass is frozen in the oven. And now it is easier to buy a new stove than to restart, ”says a Forbes interlocutor familiar with the situation.

After Vladimir Kogan's illness, Uralsib was actually headed by his eldest son. One of the Moscow financiers says that while at Tsvetkov, the main problem of Uralsib was indecision in making any decisions, now it is the self-confidence of Yevgeny Kogan, who “put on his shoulder straps too early”. There is another opinion. An acquaintance of the Kogan family describes Yevgeny as a calm and non-conflict person: “He is not emotional, does not share his feelings, is a rather conservative warehouse, is not mature enough for years”.

Eugene Kogan works in the bank from the first day of rehabilitation. What is the result? In 2015, the bank showed a profit under IFRS of 16.8 billion rubles against a loss of 9.5 billion rubles a year earlier. “What is the point of taking banks for reorganization? Everybody gave an answer a long time ago: they give you a long-term money at a low rate, which you invest in OFZs and immediately make a profit,” said former partner Vladimir Kogan. Thanks to this, Uralsib received an additional profit of 56 billion rubles, notes S & P analyst Ekaterina Marushkevich. According to her, the profit helped the bank form reserves for problem loans of 30 billion rubles and recognize losses of 25 billion rubles from insurance and leasing.

Vladimir Kogan in 2015 called insurance and leasing companies the main problems of the bank. In March 2016, Uralsib agreed to sell the pension fund to the O1 group of Boris Mints for 1.8 billion rubles. In addition, the Mintz family received the Italian Cohen snowboards, which were produced by Evgeny Kogan. The insurance company "Uralsib" was sold at the end of 2017 to the former partner of Kogan in BFA Bank Vasily Trokhin. The leasing company remained in the Uralsib group.

At the end of 2015, Kogan Sr. said that he planned to increase the assets of Uralsib to 500 billion rubles and bring the bank to the top 10. The first goal has already been achieved. The bank’s assets amount to 525 billion rubles, according to this indicator it occupies the 18th place in the banking system. “In general, Uralsib is a bank where there is an understandable strategy, but managers give themselves more to the process than to the result,” said a former bank manager. - This is a bank of endless meetings. And every top manager wants Yevgeny Kogan to be present at his meeting, hoping to get a mandate for decisive action. ” Forbes was unable to contact Evgeny Kogan to get comments for this article.

Dried out stream

At the end of April 2018, despite the rain, hundreds of people gathered next to the Afipsky Oil Refinery - the company turned 55 years old. The officials congratulated the plant workers and thanked its shareholders for the gift, an alley of glory, along which 55 oaks were planted. The shareholders themselves (among them appeared billionaire Igor Makarov and the head of the New Stream group Dmitry Mazurov) at that time thought about how to save the plant from collapse.

The counterpart of the Afipsky Refinery says that, having quarreled with younger partners, Vladimir Kogan began to slow down the modernization of the plant. Krymsky recalls that they moved away from plant management three months before the planned launch of a visbreaking unit, which was supposed to increase the depth of processing. But the installation was turned on only after a year and a half, and its price was one and a half times higher than the 11 billion rubles specified in the contract.

According to Krymsky, Kogan wanted to get rid of the refinery at the very beginning of the conflict and concluded a joint sale agreement with its partners. In early 2017, Kogan began negotiations with Dmitry Mazurov and invited him to take control of the Afipsky refinery. Mazurov's “New Stream” group included Russia's largest independent Antipinsky oil refinery with a capacity of 9 million tons, a small Mari oil refinery and oil fields.

A former top manager of the New Stream recalls that Kogan’s representatives contacted Mazurov in the spring of 2017, and in the fall, the New Stream became a co-owner of Neftegazindustrii. By that time, the shareholder structure of the company had changed. In May 2017, Kogan held an additional issue of $ 65 million, which blurred the share of junior partners. The company Yug-Invest Kogan became the owner of 66.72% of Neftegazindustrii, and the effective share of Krymsky and Iskhakov fell to 14%.

Krymsky and Iskhakov decided to challenge the additional issue in Russian and international courts, including in Cyprus, where they had signed a shareholder agreement with Kogan (Krymsky did not provide Forbes, citing a non-disclosure clause). Mazurov paid Kogan $ 200 million, becoming the owner of 16.6% of Neftegazindustrii through a chain of companies, says a source familiar with the deal. Although, according to the estimates of Krymsky and Iskhakov, the entire Afipsky refinery at that time was worth no more than $ 400 million. The former top manager of Novy Stream explains that Mazurov actually bought from Kogan an option to control Afipsky refinery - the businessman promised to sell the rest at a discount.

Krymsky contacted Mazurov shortly after his deal with Kogan, spoke about the additional issue and warned about the claims filed. After that, as Krymsky says, Mazurov met with him and Iskhakov. The meeting was attended by billionaire Igor Makarov, who allegedly stated that he had become co-owner of Novy Stream and was ready to pay the minority shareholders money for their shares at the price of the Mazurov and Kogan deal. Instead, Makarov allegedly asked to withdraw all claims.

Mazurov did not have his own money, the Afipsky refinery’s counterparty explains. Even “New Stream” financed the deal with Kogan through a loan, borrowing money from the Vitol trader and laying his share in the plant under promises to supply oil products of the same amount. Due to the tax maneuver and high currency debt, the Antipinsky Oil Refinery Mazurov also experienced difficulties. To continue the modernization, it was necessary to have $ 200 million, allegedly promised to make them Makarov. The owner of one of the oil and gas companies that worked with the Antipinsky Oil Refinery said that in 2015, the managers of Sberbank, which credited Novy Stream, themselves were looking for investors in the market for the Mazurov holding. “When Makarov appeared in the New Stream, the market took it with a positive,” the Forbes source said. - This is a man with money and without major assets under the burden. "

But Makarov set tough conditions that defended him, a Forbes interviewee explains, familiar with the situation. For example, he allegedly demanded that Mazurov return his investment with interest if the project does not pay off. Makarov was simply looking for an excuse not to pay, according to the former top manager of Novy Stream. In the summer of 2018, their partnership fell apart. The shares of Krymsky and Iskhakov in the Afipsky Refinery Makarov did not buy out, referring to temporary difficulties, and then completely refused the deal. But the co-owners of the plant had already withdrawn their claims in foreign courts. Makarov did not respond to a request from Forbes, the representative of the New Stream declined to comment.

New billionaire

With the arrival at Afipsky Oil Refinery of the “New Stream” managers, EBITDA increased from $ 100 million to $ 200 million. New Stream was going to redeem control of the plant, but did not risk after Vladimir Kogan had a stroke. And the whole of 2018, the situation on the Antipinsky and Afipsky refineries deteriorated. "The shareholders simply did not have enough wisdom to keep the project, which was fully provided, including the investment mass for the construction of a hydrocracking plant," the Afipa refinery’s counterparty summarizes the shareholder conflict. According to Krymsky, the launch of hydrocracking would increase EBITDA to $ 800 million.

In the fall of 2018, the supply of oil to the New Stream plants began. And then Sberbank intervened. In November 2018, his representatives entered the leadership of the New Stream structures. In April 2019, the director changed again at the plant - he became Sergey Krashchuk. Previously, he led the Krasnodar refinery, part of the group Safmar Mikhail Gutseriev. At the same time, Oil Technologies Gutserieva bought 100% of the Afipsky Oil Refinery from Neftegazindustrii. Sources familiar with the details of the deal say that the Kogan family received $ 20 million, and Safmar took the debt of the Afipsky refinery, which is about $ 1.8 billion.

Gutseriev was interested in the Afipsky Oil Refinery in 2016, Krymsky reported, confirming that he had participated in negotiations with the billionaire with Kogan. But when the parties were ready to begin preparing the documents, Gutseriev refused the deal, allegedly after consulting with German Gref.

The former top manager of New Stream and Krymsky claim that Sberbank controlled the entire deal. Krymsky and Iskhakov tried to meet both Gref and Gutseriev, but they ignored those requests for a meeting. “The minorities tried to get back in,” confirms the counterpart of the plant. “But Gref wanted to see Gutseriev whom he trusts.”

Gref told Forbes that the owners themselves decided to sell the Afipsky refinery. “Other owners came there, and, thank God, everything is all right there,” says the head of Sberbank. - Experienced ones came to the place of inexperienced owners in the oil business with their own oil and with great expertise. We hope that in a short time it [the oil refinery] will cope with the already started dysfunction and reach its design capacity. ” In May, the Antipinsky Oil Refinery filed a claim for its own bankruptcy.

Structures close to Novy Stream are challenging the sale of the Afipsky refinery to Gutseriev companies. Krimsky and Iskhakov are preparing to re-sue in foreign courts. The structures of Kogan, Mazurov and Gutseriev may become defendants.

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