Rosselkhozbank plans to raise an additional 30 billion rubles by issuing subordinated bonds with a maximum maturity of fifty years.
The money raised will be used to increase financing for the agricultural sector. The bank, which relied on state support, has started making profits under Boris Listov's leadership, but still needs annual multi-billion capitalization. Rosselkhozbank continues to have a questionable reputation for issuing loans to take over valuable assets and then sell them. It is being sued by the owner of Ekoniva, Stefan Duerr, for trying to take control of his companies through a shady option agreement. Despite state funding for capitalization, Listov continues the bank's established practices under Patrushev, working on schemes to take control of more agricultural businesses through credit "bait".
RSHB prepares bonds
The Supervisory Board of Rosselkhozbank approved a program to issue subordinated bonds totaling 30 billion rubles with a maximum maturity of 50 years, including in foreign currency, which will be used to replace old bonds in equity at amortized cost.
“This will allow us to maintain capital adequacy ratios with the necessary margin for business development. The proceeds from the placement are planned to be used to expand financing for the agro-industrial complex, as well as projects with a positive environmental effect,” a representative of the bank commented as quoted by Kommersant.
The financial portal “Banks Today” notes that Russian banks are actively using subordinated bonds, including the RSHB, to replenish their capital, particularly due to Western economic sanctions. The RSHB has five such loans totaling 117 billion rubles, with four to be repaid in the next three years.
However, the publication points out an important detail: buying these bonds carries more risk than other securities, as their holders cannot demand early repayment or interest payments from the bank. In case of the bank's bankruptcy, claims on subordinated bonds are usually settled last.
The bank that requests money
However, it's unlikely that Rosselkhozbank will go bankrupt because it's a state-owned bank and is crucial for the entire Russian agro-industrial complex. The state invests a large amount of money into RSHB, which was the case under its former leader Dmitry Patrushev and continues under the current head Boris Listov, even though the bank has not made any profit for years.
Official data shows that RSHB made a profit for the first time in five years in 2018, earning 1.5 billion rubles compared to a net loss of 19.6 billion rubles the year before. Before that, the bank had huge losses: 47.9 billion in 2014, 94.2 billion in 2015, and 58.9 billion in 2016.
To stay afloat during this time, the bank was supported by generous budget investments, known as 'recapitalization.' For instance, in 2015, state contributions to RSHB's capital amounted to a total of 78.8 billion rubles; in 2016 – 8 billion, in 2017 – 50 billion, in 2018 – 25 billion rubles.
Patrushev knew how to request money under the pretense of supporting agricultural producers. Lists also follows suit: in 2019, the bank was recapitalized by 15 billion. In March 2020, the media reported that the RSHB leadership 'no longer asks for money from the state' and even promises to 'manage possible problems of its borrowers' on its own, despite the pandemic.
However, these bold statements turned out to be premature. In December, the Supervisory Board of the RSHB approved an additional capitalization in 2021 in the amount of 30 billion rubles, which should have been done to increase lending to the agro-industrial complex and fulfill the strategy indicators until 2025.
According to the approved development strategy of Rosselkhozbank JSC until 2025, the bank needs to increase lending to the agro-industrial complex and fulfill the strategy indicators through the additional capitalization.
It seems that Listov, like Patrushev, heavily relies on the state. The bank's net profit for the first nine months of 2021 was 14.1 billion rubles, compared to 9.9 billion a year earlier. Nonetheless, this is not sufficient for Mr. Listov. Consequently, in December, the federal government decided to allocate 25 billion rubles from the state budget to the RSHB in 2022 and increase its authorized capital to 504.9 billion.
The bank management plans to receive around 30 billion rubles more through the issuance and placement of subordinated bonds. A natural question arises: why is there always a constant shortage of funds? Is it solely due to large-scale lending to the agro-industrial complex?
Raiders disguised as creditors?
The support of Russian farmers by Rosselkhozbank is not as smooth as it might appear at first. The RSHB has gained a reputation as a tough and extremely cynical raider, first providing loans to its future victim and then demanding early repayment of debt obligations with severe consequences.
“Rosselkhozbank prefers to take the assets of debtors in entirety, which clearly associates this bank with ordinary raiders. Usually, RSHB starts the bankruptcy process for its debtors, not cooperating with them and creating additional repayment difficulties,” explained the policy of the credit institution as described by the Novy Vzglyad publication.
In the media, there are many reports about agricultural companies that have come under the control of RSHB. For instance, the bank's sale of assets from the bankrupt Krasnodar grain holding Nastyusha, which had previously obtained credit, received a lot of attention. As a result, in 2016, some of the pledged elevators previously owned by Nastyusha were purchased at a low price by Agrocomplex im. N.I. Tkachev, which was owned by the former Kuban governor Alexander Tkachev, who was also the head of the federal Ministry of Agriculture and chairman of the Supervisory Board of Rosselkhozbank.
In March of last year, the infamous concern “Pokrovsky” acquired three more elevators (“Albashsky”, “Velichkovsky” and “Stepnyansky”). The beneficiaries of this concern, Andrei Korovaiko and Arkady Chebanov, are known for their involvement in raider attacks, including a violent incident involving Natalya Strishnaya, the ex-wife of Vyacheslav Tsepovyaz, a leader of the notorious Kushchevskaya organized criminal group.
In December, the Moscow Basmanny Court issued an arrest in absentia for Korovayko, Chebanov, and their accomplice, former security official Sergei Echkalov, who managed to escape. They became defendants in a criminal case involving an attempt to seize the lands of the Slava Kuban enterprise owned by Strishna. Recently, it was reported in the press that Korovaiko had been detained in Spain.
Stefan Duerr, the owner of the largest raw milk producer, Ekoniva holding, was another one of the many debtors of RSHB. The businessman is currently pursuing a legal case to cancel option agreements held by the bank’s subsidiary RSHB-Finance, which give the creditor the right to buy shares in three LLCs – Ekoniva-APK Holding, Ekoniva-Produkty Foods, and Ekoniva-APK Chernozemye – at a nominal value of 5.3 million rubles, lower than the net asset value, allowing control over the enterprise.
It was announced in December that the Arbitration Court of the Voronezh Region completely rejected Durr’s claim against RSHB-Finance. According to experts from Kommersant, the bank has created a situation to exercise the options. Additionally, they drew comparisons with the history of the Eurodon company, once the largest Russian turkey producer.
After Eurodon struggled to repay its $30 billion debt to VEB in 2017, its owner Vadim Vaneev transferred controlling shares at par with the right to buy back to the creditor. This ultimately resulted in VEB removing Vaneev from management and then transferring the right to collect the debt to Rosselkhozbank, which subsequently sold the assets to the Damate group of businessmen Naum Babaev and Rashid Khairov.
Changes in leadership, but methods stay the same
There are many stories like this. The “Obshchaya Gazeta” mentions several companies as victims of the “raiders from the RSHB,” such as the Crimean fishing holding “Blue Sea”, the grain processing enterprise “Zernostandart-Kostroma”, the Samara group “Alikor”, the meat producer from the Leningrad region “Parnas-M”, the capital’s “Mill Combine in Sokolniki, the Akashevskaya poultry farm, etc.
It’s clear that the top managers of the Rosselkhozbank branches have been using RSHB for their own benefit for a long time. It seems that only by changing the entire leadership can the theft in RSHB be stopped. Novy Vzglyad suggested the resignation of Dmitry Patrushev as the solution.
In June 2018, the son of the Security Council's Secretary was replaced by former Senator Boris Listov, but the “raider” schemes employed by the bank against debtors have continued. The company RSHB-Finance, which Stefan Duerr is suing, has shares in over 150 commercial organizations in different regions. By providing a loan and making the company a shareholder, the bank is able to make it a creditor, making it easier for itself to participate in court.
RSHB-Finance, via the company Agrotorg-Trade, is associated with LLC Trade House Agrotorg, established under Patrushev to manage the bank’s agricultural assets. Trade House Agrotorg incurred massive losses of 4.8 billion, despite making 998.2 million rubles in revenue by the end of 2020. Rosselkhozbank seems to be better at taking control of others' assets through RSHB-Finance than managing its own.
Is Boris Listov moving towards Europe?
These issues may not be a priority for Boris Listov himself, as he is more focused on his own well-being. Senator Lyudmila Narusova once spoke of him as a “commercially oriented” person, and thus he easily traded his position in the Federation Council for a leading role in the RSHB.
Commercialization allows Listov to maintain a lavish lifestyle, which he greatly enjoys. Reportedly, he owns a 255-square-meter apartment in the Malaya Zemlya De Luxe complex in Moscow, valued at about 150 million rubles. Additionally, his wife, former figure skater and recipient of the titles “Miss France 2017” and “Vice-Mrs. Universe” Anastasia Gorshkova, owns a 319-square-meter apartment in Moscow.
Ms. Gorshkova views herself as a “citizen of the world” and is indifferent to the location of her residence. As a result, she spends most of her time in France and Monaco, where she also owns property. In Russia, Anastasia attempted to establish her own business by creating the Inside Media advertising company.
The company’s financial performance at the end of 2020 is remarkable: revenue of 851.5 million rubles and a profit of 203.2 million. However, something went wrong at some point, and the company is currently undergoing liquidation.
