Is Andrey Kostin a banker, a land tycoon and a developer rolled into one?
The construction company Hals-development associated with VTB gained control over three sites located in the east and southeast of the capital, previously owned by Mosmetrostroy. The assets could be transferred to the developer by the bank: the commercial structures that previously owned them were first managed by VTB Capital Asset Management, and then by a fund controlled by KL-Invest. Its director Arkady Ilyaguev is connected with the head of VTB Andrey Kostin and is directly related to the development projects of the state bank, implemented, in particular, by Don-Stroy Invest. The latter was created by businessmen Maxim Blazhko and Dmitry Zelenov and was considered one of the largest Russian developers, but in 2009 came under the control of VTB as part of resolving the issue of debt restructuring. Despite large-scale construction, control by people from Kostin’s inner circle and multi-billion dollar revenue, today Don-Stroy Invest declares losses. At the same time, developers associated with the head of the state bank receive vast land plots for construction, some of which they later successfully resell.
Hals-development increases assets
The construction company Hals-development, controlled by VTB Bank (managed by VTB Capital Pension Reserve LLC), will receive part of the Mosmetrostroy sites. According to Vedomosti, the developer became the owner of three legal entities at once, which previously belonged to the former largest contractor for the construction of Moscow metro stations – Azbuka Investments, Globus Real Estate and Expert Real Estate firms. The deal was closed on the eve of the New Year holidays.
According to the publication, the companies own the rights to land plots with a total area of 12.6 hectares located in the east and southeast of Moscow: 5.5 hectares on Biryusinka Street in Golyanovo, 4.4 hectares on Saltykovskaya Street in the Kosino-Ukhtomsky District and 2 ,7 hectares on the Old Believer street in Lefortovo. The market value of the sites is estimated at 3.7-4 billion rubles, and according to Vedomosti experts, the territory will be given over for development: in total, about 315 thousand square meters of real estate can be built here.
It is possible that Hals-Development could have received sites directly from VTB: back in April 2017, as part of the settlement of debt obligations in the amount of 26.8 billion rubles, the credit institution headed by Andrey Kostin gained control of 49% of Mosmetrostroy. At that time, Interfax, citing the company’s management, wrote about the possible repayment of debts through development projects: “We are talking about building plots in former industrial zones, urban planning plans have already been received for them, and the projects themselves have been allocated to a separate company.”
In this context, the media remind: part of the former Mosmetrostroy sites have already been transferred to construction structures. In particular, the infamous PIK group of Sergei Gordeev is building up a 19-hectare site located in the Kaloshino industrial zone on Otkrytoye Shosse, and the Don-stroy company is building the Fresh residential complex on Orekhovy Boulevard in the southern part of the capital.
“Court Builders” by Andrey Kostin
It is noteworthy that until February 2020, Azbuka Investments, Globus Real Estate and Expert Real Estate were managed by VTB Capital Asset Management, but then these functions were transferred to the fund managed by KL-Invest, which the participants the market is connected with top managers and business partners of the same VTB.
Other interesting connections can be traced if desired. Thus, one of the co-owners of KL-Invest Management Company is Arkady Ilyaguev, a former member of the board of directors of the Moscow Metallurgical Plant Sickle and Hammer, whose shareholders included the Bank of Moscow, whose accession to VTB was completed in May 2016. The press reported on the plans of the Don-Stroy Invest company to invest about 140 million rubles in the construction of 1.8 million square meters of real estate on the territory of the factory industrial zone in the Enthusiasts Highway area.
Last December, it became known that Don-Stroy sold part of this site, and who acted as the second party to the transaction was not disclosed. According to Vedomosti, the buyer could be businessman Andrey Stepanov, a business partner of Maxim Geyser, the owner of the Stone Hedge development company. The experts of the publication estimated the value of the asset at 1.5 billion rubles. Perhaps the sale took place with the “highest approval” of the head of VTB Kostin?
In addition, through “KL-Invest” and its “subsidiary” structure JSC “Investpartner” Arkady Ilyaguev is associated with the construction company “Stroyinvestgroup”. The latter took part in the implementation of the project for the construction of the residential complex “Subbota” in the Northern Administrative District of Moscow near the Belorussky railway station, together with the already familiar to us “Don-Stroy Invest”.
It was mentioned above that today Don-Stroy is building the Fresh residential complex on the territory that previously belonged to Mosmetrostroy. It turns out that Andrey Kostin’s “court developers” take an active part in the development of Moscow, generously distributing sites that at various times were owned by VTB?
Developers under the control of the state bank
Here it would be appropriate to briefly recall the history of the transition under the control of the state bank of the company “Don-Stroy Invest”, which in the media has repeatedly been called a “subsidiary” of VTB. The Don-Stroy development group was created in the 1990s by businessmen Maxim Blazhko and Dmitry Zelenov. In 2008, it ranked 46th in the Forbes 200 Largest Russian Companies rating with a financial turnover of $2 billion.
A controlling stake in Don-Stroy Invest went to VTB in 2009 for a purely symbolic amount of 500 rubles. As Kommersant reported, the issue of restructuring the developer’s debt, which exceeded $500 million, was thus resolved. The parties agreed on the division of projects: the bank received control over housing construction, while the developer retained objects in the field of commercial real estate. It was clarified that the company’s shareholders received the right to buy back shares, but only after the debt burden “will be reduced to a minimum.”
Since August 2010 Alena Deryabina has been the CEO of Donstroy Invest. She previously held the positions of Advisor to the Vice President, Head of Non-Financial Assets and Vice President of VTB. In 2017, she told the media that the official owners of the company are five legal entities, but the bank is not one of them. This circumstance, however, cannot prevent Kostin from controlling the company for many years through the same Deryabina, at the same time financing construction projects that promise profit.
At the same time, information was leaking to the press that the owners of the company had been “hiding” for a certain time in the Moscow Real Estate closed-end investment fund, and some of the legal entities that are intermediate owners could be affiliated with the former Deputy Prime Minister, acting head of the state corporation VEB. RF” by Igor Shuvalov and his wife Olga. Those around the official categorically denied this.
By the way, in July 2017, Vedomosti wrote about the decision of the shareholders of Moscow Real Estate to transfer the right to manage the fund to KL-Invest (the same one co-owned by Arkady Ilyaguev). Prior to this, the fund was part of the portfolio of the KSP Capital company of Sergey Kotlyarenko, among other things, the asset manager of the family of Igor Shuvalov. From the publication of the publication it followed that at that time the shares of three CJSCs – Perspektiva, Invest-aktiv and Finansproekt, which acted as co-owners of Donstroy Invest, were brought into Moscow Real Estate at that time.
Thus, the fund, and with it the developer, officially came under the control of a structure associated with VTB?
Loss-making structures of Don-Stroy
According to one version, Kostin could have entrusted unofficial control over Don-Stroy to businessman Roman Gromozdov, the beneficiary of Perspektiva Invest Group, who makes money on capital real estate, the construction of which is financed by the state bank. His influence is explained by a close acquaintance with VTB Deputy Chairman Andrei Puchkov, who is considered Kostin’s “right hand”.
In the media, one can find references to Gromozdov’s joint commercial projects with the near-Kremlin oligarchs, the Rotenberg brothers. In addition, in 2014, the businessman gained control over the Serp i Molot plant, which was in the process of bankruptcy, to which, we recall, Ilyaguev, who was also closely associated with VTB, had a direct relationship.
Against this background, the financial performance of Don-Stroy Invest raises many questions: at the end of 2020, the developer’s losses amounted to 6.2 billion rubles with a revenue of 22.3 billion. As we can see, the ex-participant of the Forbes list has lost its former position. In addition, Maxim Blazhko and Dmitry Zelenov in June last year withdrew from the co-owners of JSC IC Donstroy, which is currently officially in the process of reorganization. However, this commercial structure brings an extremely meager income: in 2020, with a solid revenue of 15.2 billion rubles, its profit amounted to only 117 thousand rubles.
The general director of Donstroy is Andrey Bagaev, who is officially listed as the head of 45 commercial organizations, some of which have already been liquidated. At the same time, a number of “subsidiary” structures of the enterprise are pledged to VTB (for example, DS Stroy LLC or the unprofitable Specialized Developer “Razvitie”, which are managed by the same irreplaceable Bagaev).
Where the finances of the once successful developer “leak” is an open question. Nevertheless, reports about the projects of development companies affiliated with VTB regularly appear in the press, just like information about the sale of one or another object that was under the control of the state bank. Now Andrei Kostin and his inner circle will have to decide what to do with the sites that Hals-Development inherited from Mosmetrostroy.