VEB.RF will receive more than 75% of the professional football club CSKA by converting its debt into shares. This was announced by the chairman of the state corporation Igor Shuvalov, Interfax reported. Two interlocutors of Vedomosti at VEB.RF say that the state corporation does not claim to manage the club. The previous owner and president of PFC CSKA Yevgeny Giner will retain his post, and the state corporation will manage the real estate, the interlocutors of the newspaper said.
The deal will bring the club to a new level of development, strengthen it financially, and improve the quality of VEB.RF assets, Maksim Oreshkin, Minister of Economic Development of Russia and VEB.RF Supervisory Board member, listed on Facebook. According to him, CSKA’s debt burden will decrease, the club will be able to count on new sponsorship contracts and an increase in cash flow from leasing commercial real estate. Oreshkin also confirmed that Giner will continue to manage the club. “Everything will be fine, the fans should have no cause for concern,” Giner said through a representative.
CSKA is a seven-time USSR champion and a six-time Russian champion. This season CSKA is in 4th place in the Russian championship. 100% of PFC CSKA belongs to the British Bluecastle Enterprises Limited, the beneficiary of which is Giner, according to her report for 2018. 76.44% of CSKA, it is noted in the same place, is pledged under the company’s obligations.
Pass to banks
FC Dinamo
VTB Bank acted as a creditor to the All-Russian Physical Culture and Sports Society Dynamo, which, in addition to the football club of the same name, owned a development project and the rights to build a sports arena in Petrovsky Park. Investments in them were estimated at $ 1 billion. In the spring of 2009, the Dynamo society announced the transfer of 75% minus 1 share to VTB on account of the debt of the Dynamo Management Company (which manages the development project) and 74% of the football club. At the end of 2016, the state bank sold the club’s shares for a symbolic 1 ruble. society “Dynamo” and pledged to provide sponsorship for three years.
FC “Torpedo”
One of the oldest Russian football clubs, Torpedo, faced serious financial difficulties in 2014–2015. The club dropped out of the Premier League, its total debt exceeded 230 million rubles. In 2017, the club was bought out by the owner of the Moscow Credit Bank, Roman Avdeev. His company Ingrad has promised to reconstruct the stadium. It is also building the RiverSky residential complex in and around Torpedo.
VEB gave a loan of $ 240 million for the construction of the CSKA stadium in 2013. The construction cost was estimated at $ 350 million. The total area is 171,000 sq. M. m, said in his presentation. 78,000 sq. m occupies a stadium for about 30,000 people, the rest is three office towers, including the 38-storey Golden Tower in the form of the UEFA Cup, which CSKA won in 2005, a hotel and infrastructure.
Bluecastle Enterprises’ revenue, according to the report, is $ 100.4 million in 2018, operating profit is $ 12.5 million. The independent auditor in the report draws attention to the fact that total liabilities exceed assets by $ 8.8 million: there are serious doubts that the company able to continue in the future. It also mentions that the company depends on the constant support of the beneficiary and his companies. Giner has difficulties with some assets: for example, Rosgosstrakh, which is controlled by the Central Bank, demands from his company Capital Life Life Insurance (formerly RGS-Life) 150 billion rubles. for using the brand.
VEB.RF, CSKA and the Russian Direct Investment Fund (RDIF) are looking for investors for the club, say two employees of the state corporation. RDIF participates, since there are large investors among its partners, including those interested in investing in sports, explained a person close to VEB. VEB.RF together with partners will work to attract a new strategic investor within 1-3 years, said the representative of the state corporation Andrey Samokhin.
For CSKA, large international investors from RDIF partners with experience in investing in world-class sports assets are being considered, the fund’s representative confirmed. For example, the “daughter” of the RDIF partner, the Qatar Investment Authority, controls the Paris Saint-Germain football club. A member of the Abu Dhabi royal family (the emirate’s finance department is also a RDIF partner), Sheikh Mansour bin Zayed al-Nahya owns the Manchester City club.
CSKA is one of the greatest clubs in Russia and one of the most expensive brands in the country, says Deloitte partner Sharif Galeev: he is interesting to investors, the question is who can afford it. He believes that rather it may be a structure associated with the state. Galeev is not sure that CSKA will be able to attract investors from abroad in the presence of more productive European clubs.
VEB.RF does not plan to sell the club’s real estate, says a person close to the state corporation. Three consultants who worked with the club assure that VEB.RF has long been trying to sell the offices.
The complex was commissioned in 2016, but there were almost no transactions for the first two years, says Irina Artemova, Sales Director of Knight Frank’s offices. At that time, there were many vacant offices on the market, and VEB Arena was losing because of its location, says Alan Baloev, director of the capital markets department at Cushman & Wakefield. In addition, the business center has an ineffective layout, next to the stadium – many tenants did not like the neighborhood, adds Artemova. According to her, the VEB Arena began to fill up only in 2018, now 12% of the area is empty. Among the tenants are Transneft Technologies, IP Video Systems and PFC CSKA.
The club was selling offices at the rate of 270,000 rubles. for 1 sq. m, knows Artyomova. It turns out that the club expects to bail out 17.2 billion rubles for the business center, and its market price, in its opinion, is about 11.5 billion rubles. The assessment of the partner of Colliers International Stanislav Bibik is higher – 14-16 billion rubles.
.