Dagestani fighters: how Kerimov and Magomedov are fighting for Makhachkala port
The port of Makhachkala under the court decision is to pay off the debt of 156 million rubles otherwise there is an impending danger of bankruptcy. This is probably an important episode in the battle for the port, which is fought by the structures of Suleiman Kerimov and Ziyavudin Magomedov.
Slice of victory
The Arbitration Court of Dagestan has partially satisfied the claim of the little known Cypriot company Arolia Holdings Limited, which was trying to recover 678.18 million rubles from the Makhachkala Commercial Seaport, says the Court's website. The decision was made on Wednesday, 31st of August. The Court ordered the port to pay only 156 million rubles, said the assistant to the CEO of the enterprise Alikber Abdulgamidov to RBC. This amount is comparable with the net profit of the company, which at the end of last year amounted to 161.5 million rubles with the revenue of 657.44 million (data from SPARK-Interfax).
Makhachkala port’s debt to Sberbank was formed in 2008-2009, when the port was headed by Abusupyan Kharkharov (Kharkharov resigned in September 2010), told Abdulgamidov. According to him, the loan is secured with "cranes, ships and other property." In 2013, Sberbank ceded the rights to the credit to Arolia Holdings Limited. A source close to Sberbank, earlier told RBC that at that time, including the interest, debt was estimated at "about 600 million rubles". The bank sold it because the loan was not serviced. As follows from the Kirov District Court materials, (this court also addressed a similar argument), as collateral for the loan there are four gantry cranes and two ships, Dagestan and Ali Aliyev. The port also has provided the equipment of the grain terminal as a security.
Abdulgamidov did not specify how it was possible to reduce the amount of claims more than four times, but acknowledged that "it is necessary to pay the debts." The port is satisfied with the decision of the court, but has not yet decided whether to challenge it, the decision text has not yet been done.
The Arolia Holdings representative we could not reach.
The Makhachkala port is the only ice-free port on the Caspian Sea. Its share on the Russian market is small: from the total volume of cargo turnover in 2015 (676.7 million tonnes), only 3.8 million tons were handled in Makhachkala, from which oil and oil products make 3.4 million tons (data of Port News). But through this port the oil produced by the Russian, Turkmen and Kazakh companies in the Caspian Sea is transshipped and then it is exported by pipeline Makhachkala - Novorossiysk, says development director of PortNews Nadezhda Malysheva: "This explains why there is such a fight for the port: the owner will be able to influence the regional oil exports."
And there are prospects for the port. In late April, the then CEO of the port Akhmed Hajiyev said that the port is ready to resume the ferry service with Iran after the lifting of sanctions and has already prepared the equipment for reception of up to 200 reefer containers per month. According to him, the capacity of the port of Makhachkala is 11.4 million tons per year, of which crude oil and petroleum products make 7.9 million tons. The capacity of the grain terminal is 0.5 million tons per year, he added. Removing sanctions against Iran intensified shipping, transshipment of oil and other commodities can be increased, acknowledges Malysheva.
It is known that since the mid-2000s, Suleiman Kerimov, a major philanthropist and investor of Dagestan, is trying to take control of the port. The privatization of the enterprise was postponed for several years: it still is a FSUE run by the Agency for Marine and River Transport (Rosmorrechflot). However, the port can actually be controlled through the CEO: it all depends on whose candidate heads it. Since September 2010, the port has been managed by Akhmed Hajiyev, who was considered a Kerimov’s man (he is the brother of Kerimov’s friend, the State Duma Deputy Magomed Hajiyev, said RBC). However, in late May 2016, when the term of office expired, Rosmorrechflot held a contest and appointed the new manager, Andrey Gormakh, who is considered to be protege of Ziyavudin Magomedov, who in 2013, joined the struggle for influence in the country and, in particular, for control of the port).
Gormakh in 2013-2015 worked as the Deputy CEO of the United Grain Company, controlled by Magomedov’s Summa group. Summa which together with the Transneft controls the Novorossiysk Commercial Seaport (between Makhachkala and Novorossiysk the main line is laid) has repeatedly stated its interest in the Mahachkala port and even was going to build a new terminal there. Even now Summa "sees great potential for the development of the port" and is ready to consider the possibility of buying it, if the government puts it up for sale, said RBC's representative. On the situation with the court decision on the Arolia’s lawsuit he did not comment.
In late May, the team of the Makhachkala port gave to the appointment of the new CEO Andrew Gormakh a hostile reception and defended its former manager Akhmed Hajiev. The union leaders have gone on strike and wrote a letter to the Presidential Administration alleging Gormakh’s incompetence and threatened to boycott the elections to the State Duma. The new manager did not get the job. Kerimov’s people, probably managed to keep control of the port, because Gormakh’s appointment did not actually take place, says the chief editor of the website Caucasian policy Beslan Uspanov. As it is, the port of Makhachkala, as an asset which is now in decline is not so interesting to Magomedov’s and Kerimov’s structures, as the struggle for influence over the republic, he said. The winner is likely to mark his superiority in Dagestan, suggests the expert. There is no economic component in the fight for the port, agrees the managing partner of InfraNews Alexey Bezborodov.
Rosmorrechflot’s decision on the appointment of the new CEO has been challenged by another applicant for this position, Magomed Kantaev. Who stand behind him is unknown, but his claim is clearly played into the hands of the former head of the port Hajiyev: at his request, on May 30, the Chechnya Gudermes City Court granted the provisional measures and forbade to order on the appointment of the new head of the port. Moreover, the Prosecutor General's Office on June 9, revealed irregularities in the conduct of this competition and requested the head of Rosmorrechflot Vladimir Olersky to eliminate the violations. But the agency will defend the decision on the new manager of the Makhachkala port using "all legal instruments," said RBC's representative. The elected CEO of the company is Gormakh, the question of the re-competition is not being considered, she said.
Hope for rescheduling
Ahmad Hajiyev previously reached a verbal agreement with the lender (Arolia Holdings) on the restructuring of the loan, according to Abdulgamidov. But after the attempt of Gormakh’s appointment, the creditor probably being afraid of default of the port’s agreements, appealed to the court, he suggests. Now, the port is not able to pay off the debt of 156 million rubles, so its management will negotiate with the lender on deferring the payments and drafting the debt payment schedule, said the port’s acting CEO Murad Hidirov to RBC through the press service.
But if the port is not able to pay off the debt and to agree on the installment plan, the port’s property (except the berths and assets that may only be in state ownership) can be sold at auction during bankruptcy or enforcement proceedings, warns a federal official familiar with the situation. At the same time, the port has the property that is not subject to alienation to private property, so the activities of the company will not be stopped, stressed the interlocutor from the Agency of sea transport.
According to a source in the republican government, Arolia in 2013 bought up Sberbank’s debt with 50 percent discount (the bank representative is not commenting on this). According to him, the company has not made an attempt to recover the debt "for a long time". And the creditor's activity he explains with the intensification of conflicts around the port and the prospect of a change of its management.
"This is very similar to the classical scheme of the 1990s, when enterprises were seized: they would get a loan in a bank secured by the property, then, some offshore in Cyprus would buy it and begin to claim the property, says the employee of one of the largest shippers port. - The initiators of this action have purchase: they have both the property, and the company, so they can buy it at bargain prices as part of bankruptcy proceedings."
According to the Cypriot registry, 100% of the Arolia Holdings is owned by the Fort Partners S.A., registered in the British Virgin Islands. The representatives of the two companies could not be reached. But, according to the files of the commercial courts in Moscow and Dagestan, in 2012-2013, Arolia Holdings was involved in the bankruptcy of the other Dagestani company - Dagestan Airlines, having again bought the rights of one of the creditors.
Arolia Holdings is affiliated with Kerimov’s Nafta Moskva said to RBC a source in the Dagestan government and confirmed the employee of one of the port’s largest shippers. The RBC’s request directed to Kerimov’s reception, remained unanswered.
The President of Dagestan Ramazan Abdullatipov said in an interview with RBC on July 11, that he supports the speedy privatization of the port and wants it to be handed over to the investor who offers offer the best development program. "Instead of that, secretly from me, they began to transfer the port from one group of influence to another one. What does that mean? That means that we bring the conflict in Dagestan, because behind the each group of influence there are 300-500 people", complained Abdullatipov.
He warned that if "the two groups of Dagestani" (Kerimov’s and Magomedov’s structures) will not stop the confrontation, the port would go to a third party: "I do believe that we need a third person for the development of the port, and we are already negotiating with certain people." Later, it transpired that this asset interests in the ex-owner of the Cherkizovsky market Telman Ismailov. According to the Dagestani media, now, he is negotiating with the republican officials on behalf of the Turkish holding Yildirim Group Inc., a major operator in the field of shipbuilding, upgrading of port facilities and the organization of the logistics of the Marine Trade. However, Abdulatipov’s representative did not commented on that, she only noted that "the negotiations are in the final stage and soon Ramazan Gadzhimuradovich will announce his decision."
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