Alfa-Bank

About the Company

One of the major Russian banks in terms of the assets and equity, and the largest private bank in Russia. Performs all basic types of banking operation: retail and corporate business, investment banking, trade financing, asset management etc.

Project Investment Concept

Establishment of a leading business in the growing Russian banking sector.

Implementation

The Bank received the initial organizational, investment and management impetus for further development. Whereafter Alfa-Bank continued to develop as a separate business within the Alfa Group Consortium structure.

Rostov-on-Don Bakery Plant No. 1 (RDBP)

About the Company

The Project was implemented based on a grain holding company established in the North Caucasus. RDBP, which is the largest company processing and exporting high-quality grain products in the south Russia, became the holding's base company, and it possesses outstanding capacity for grain processing, storage, transshipment and transportation.

Project Investment Concept

An undervalued asset with its export shipping terminal, which is fully provided with high-performance equipment, is located at the crossroads of the main Euro-Asian traffic routes. The goal was to increase its production and transshipment capacity, including in terms of export volumes. Commercialization of the company’s substantial potential for growth it asset value.

Implementation

Standards of operational and financial activities were improved, and a strategic development program was drawn up. As a result, the company’s investment appeal significantly increased, and its market position was strengthened. In 2005, RDBP was bought by a strategic investor, the international company Glencore.

Balakhninsky Pulp and Paper Plant

About the Company

Volga (Balakhna, Nizhniy Novgorod Region) is one of the largest newsprint producers with a Russian market share exceeding 30%. It sells to about 60 states; the major share of exports goes to Western Europe (the most famous newspapers in the EU are printed on Volga-produced paper), and its products are also exported to CIS countries, Eastern Europe, Asia and Africa.

Project Investment Concept

The asset has a large potential for growth in value. The domestic newsprint market is growing, and there are substantial exports.

Implementation

PPP was in technical default in respect of a loan repayment. Having acquired control of Volga, Alfa Group restructured the loan and stabilized the financial situation. The new management team upgraded a substantial part of the equipment, improved management efficiency, and reduced operating costs significantly. Volga’s performance indicators now match the best in the industry. Following the project completion, Volga was sold to a Russian strategic investor in 2003.

Vladpivo

About the Company

Established on the basis of a Vladivostok brewery wich was on the verge of bankruptcy.

Project Investment Concept

Creation of an industry leader in Russia's Far East market.

Implementation

Anti-crisis measures were taken: the financial situation was stabilized, strong management was recruited, new production was launched, and the business was restructured. The project  partner was the International Finance Corporation (IFC) which provided a loan for long-term development and invested in the company’s equity capital. The plant became one of the largest breweries in the region and managed to substantially increase its share in the Far East market. In 2008, Vladpivo was acquired by one of the world's major brewing concerns, SABMiller.

VimpelCom

About the Company

The telecommunications market leader in Russia and the CIS. Provides mobile communications services under the Beeline brand, one of the most recognized in Russia. The company’s license covers an area with a population of 140 million people. The company is the second large mobile operator in Kazakhstan. VimpelCom was the first Russian company to be listed on the New York Stock Exchange (symbol: VIP).

Project Investment Concept

A leader of a rapidly growing industry. It was a favorable target for strategic investment because of the low price environment after the fall of dotcom stocks in 2000. Has a strong and reliable partner (Telenor, the Norwegian telecommunications holding company).

Implementation

Management of the stake in VimpelCom from the very first moments of the consortium’s investment activities in telecommunications; efficient participation in the development of the operator; attraction of major first-class foreign financing for the creation of the company’s regional networks. Investment and management decisions of Alfa professionals formed the basis of VimpelCom strategy. By the time of the withdrawal from the project, the project objective had been attained: the extension of the license coverage for practically the whole territory of Russia. VimpelCom CAGR during our three-year participation in the project were the highest in the industry: the user base increased over 16.6 times, the number of networks in the Russian Federation increased from five to seventy, market capitalization increased 9.25 times, and NYSE share price – 6.5 times. Alfa Group then consolidated the telecommunications assets in a special company Altimo, to which the shares in VimpelCom were transferred in 2004.

D Distribution and the Smirnov Brand

About the Company

In 2000, А1 became the management company of the Trading House of the Descendants of P.A.Smirnov which had the rights to the Smirnov vodka brand. In 2006, D Distribution was established, a joint venture of А1 and Diageo, the largest world producer of alcoholic drinks. According to the terms of the thransaction, Diageo became the owner of 75% of the shares in the future company, and А1 obtained 25%. Diageo was given the opportunity to be engaged in selling Smirnov vodka, and it waived the selling of its own Smirnoff vodka in Russia. D Distribution is an exclusive distributor of the Diageo brands in Russia: Johnnie Walker, White Horse, Bushmills, Baileys, Captain Morgan, Jose Cuervo, a series of de luxe brands and a collection of single-malt whiskies.

Investment Concept of the Project

Establishment of a market leader in selling premium alcohol in Russia. Considerable increase in sales. A new development of the Smirnov brand thanks to the revised marketing strategy.

Implementation

In 2008, Diageo announced repurchase of 25% of the shares of D Distribution from А1.

West-Siberian Metallurgical Industrial Complex

About the Company

One of the largest complete-cycle integrated metallurgical works in Russia. It produces by-product coke, metallurgical and rolled stock, and consumer goods.

Project Investment Concept

High production output potential, possibility of being taken over by a large metallurgical company.

Implementation

The enterprise was in a grave operating and financial position. In 1997-1998, the investor implemented an anti-crisis program. As a result, the company's economic position substantially improved. Significant investment funds were attracted and about USD 100 million were also raised to finance the working capital. The project was completed in 2000.

Kama Pulp and Paper Plant

About the Company

Kama Pulp and Paper Plant (Krasnokamsk, Perm Krai) produces newsprint and other products. It is one of the ten largest companies in the industry. Its products are exported to the CIS, Eastern Europe, Asia and Africa.

Project Investment Concept

Possibility of significant improvement in the company’s performance given the growing domestic market for newsprint and a significant export volumes.

Implementation

The plant was the last non-privatized enterprise in the industry, and it had lost its market position. As a result of an anti-crisis program, all major performance indicators significantly improved and the PPP reached operational breakeven point. New sales and staff incentive schemes were introduced. Some measures were taken to for re-equipping to improve product quality, to establish self-sufficient timber raw materials and develop an environmentally friendly technology. In 2005, the plant was sold to a strategic investor.

Cosmos Hotel Complex

About the Company

One of the largest hotel complexes in Russia, with a favorable location, developed infrastructure and a well-known brand, and an annual turnover of tens of millions dollars.

Project Investment Concept

Undervalued asset, shortage of three and four star hotels in Moscow, good market prospects. Solid capitalization growth potential.

Implementation

Purchase of a controlling stake in Cosmos and cooperation with its principal shareholder, the Moscow Government, resulted in a significant increase of the company’s investment appeal. Cosmos demonstrated the best performance among hotels of its class in the Russian capital. The stake was sold to a strategic investor in 2003.

Volgograd Metallurgical Plant Krasny Oktyabr (VMP)

About the Company

VMP Krasny Oktyabr (located in Volgograd) is one of the leading metallurgical plants which produce special steesl, including for the auto industry, chemical and petroleum industry, and enterprises in the defense and nuclear reactor industries.

Project Investment Concept

To substantially improve the company’s business in order to increase its value.

Implementation

In 2001-2002, the production and financial indicators significantly improved and A1 sold its stake.

United Gold Company

About the Company

United Gold Company (UGC) specializes in projects with fast-developing companies wich mine precious and rare-earth metals.

Project Investment Concept

Acquisition of assets in what is a promising industry, from the standpoints of its development and high yield.

Implementation

UGC established a joint venture with CJSC Artel Starateley Amur, and acquired 19.5% of shares in the Canadian firm Silver Bear (which is conducting geological exploration of a major silver mine in Yakutia). It is also working on various mining business development projects in Central and South-East Asia, Africa and Latin America.

Patra

About the Company

A big modern brewery in Yekaterinburg with a large market share in the Urals. The plant had substantial reserves to improve product quality, to optimise its pricing policy, costs, and its capacity utilization.

Project Investment Concept

The idea of the project was to gain control of the most attractive brewery in a region where there are no similar enterprises owned by transnational corporations, and to significantly increase its value. The projectcombined a number of investment strategies: organic growth, restructuring and leverage.

Implementation

Operating and production activities were streamlined, and a long-term program was developed to convert the company into the leading brewer in the region. The project's success increased strategic investors’ interest in Patra. In 2005, Patra was sold to Heineken Corporation.

Perekryostok Retail Chain (X5 Retail Group)

About the Company

Perekryostok is one of the first food retail chains and one of the most competitive and efficient retail structures in Russia. IGD, an international consulting company, listed Perekryostok among Ten to Watch – the ten most promising retail chains in the world.

Project Investment Concept

Establishment of a leading retail company.

Implementation

In 1994, it was decided to go into the food retail business. Perekryostok managed to quickly become the sector leader and was later established as an independent business within the Alfa Group Consortium. Over recent years the company has demonstrated an unprecedented growth rate and merged with Pyatyorochka, Karusel and Kopeika supermarket chains to form the largest CIS multi-format food retail company – X5 Retail Group.

Petrosakh and Sakhalin-6

About the Company

Petrosakh is a vertically integrated oil company in Sakhalin. It has its own oil production, processing and shipping facilities on the coast. The major part of its production is shipped to Asian-Pacific countries, and oil products are also supplied to satisfy Sakhalin’s own needs. The company obtained a license for geological exploration of a large oil and gas field Pogranichnoye (Sakhalin-6), on the island's shelf.

Project Investment Concept

Petrosakh is highly promising strategic company ripe for investment as, along with a complete-cycle infrastructure, it possesses a solid resource base.

Implementation

Optimization of Petrosakh management, restructuring of its production and sales schemes,  and also of its entire economic activities. In cooperation with foreign experts, marine seismic exploration of the shelf field was carried out. In 2004, Petrosakh was sold to a strategic investor – Urals Energy Company.

Rosvodokanal Group (RVK)

About the Company

A national water utilities operator supplying the public housing sector. For 60 years Rosvodokanal has been a leader in the operation of water supply and disposal systems in Russia. It has experience of operating  almost throughout the entire country.

Project Investment Concept

Establishment of one of the first utility services companies to work under market conditions. Entering the promising market of long-term projects through acquiring of control of this well-known enterprise with its significant technological and management resources.

Implementation

During the project, the company was reorganized into an interregional holding. RVK includes a national operator, urban water systems management companies, and a service company providing consulting and engineering services. RVK offered to the market a promising model of public-private partnership benefiting both municipalities and investors. It permits municipalities, while retaining their title to facilities, to quickly move to market relations in utility services.

RVK is emerging as a major independent company in the CIS. It manages water facilities in Barnaul, Kaluga and Kaluga Region, Krasnodar, Omsk, Orenburg, Tver, Tyumen. It obtained a license to operate the largest Ukrainian water system located in Lugansk Region.

RVK performance indicators are among the best in the Russian utilities sector. It has managed to substantially cut management and operating costs, and also losses of water; the technical condition of water networks and quality of services are being constantly improved. RVK has become an attractive partner for well-known international investors. Deutsche Bank acquired 10% in RVK. The company has also reached an agreement with the EBRD on a loan with a limit in excess of USD 200 million under the terms unprecedented for a domestic utility service company. It successfully made its inaugural bond issue for a total of RUB 1.75 billion. RVK has obtained international credit ratings, was the first in the sector to prepare its statements in accordance with IFRS and to arrange for an international audit of its water systems. The authoritative American business journal Global Finance named RVK the best Russian utility company in 2007.

SUN Interbrew

About the Company

The second largest brewery holding company in Russia and the largest in Ukraine in terms of production and sales volumes. Formed as a strategic partnership between the Indian Sun Group and the Belgian concern InBev. Core brands are: in Russia – Klinskoye, Tolstyak, Siberian Crown, Staropramen, Stella Artois, Beck’s; in Ukraine – Stella Artois, Beck’s, Chernigovskoye, Rogan, and Taller.

Project Investment Concept

Securing a promising position in a rapidly growing industry. Purchasing a significant stake in the market leader. Increasing the asset value.

Implementation

Consolidation of a significant interest in SUN Interbrew, which was bought by InBev Concern in 2005. The transaction was one of the largest in the history of the brewing industry in Russia and the CIS.

Syabar

About the Company

A former state-owned brewery in Belarus (located in Bobruisk, Mogilev Region). Before attracting investors, it was in the process of bankruptcy and had practically lost all of its market, and regularly suspended its operations.

Project Investment Concept

Creating with its partners a major efficient business to produce and distribute beer, a company which will be the market leader with a high growth potential.

Implementation

Syabar underwent a complete upgrade to become the first modern brewery business in Belarus with highly efficient facilities, and a renewed and high-quality portfolio of brands. Syabar is the second largest brewery in the country, and its new brands have quickly gained popularity.

In 2007, the company was sold to Heineken, the international brewing concern.

TNK-BP

About the Company

A vertically integrated oil company. Its portfolio includes mining, processing assets, and gas station networks in Russia and Ukraine.

Project Investment Concept

Establishment of one of the largest oil and gas companies.

Implementation

Alfa Group, jointly with Access Industries/Renova, acquired control of the company having won the investment tender and fulfilled the investment conditions. An anti-crisis program and a renovation program were implemented, the company’s specialization and operational geography were significantly expanded (today the company is present in all of Russia's largest oil and gas producing regions). During the project implementation, TNK spun off from the Alfa Group structure to become an independent business. Following the merger with the Russian oil and gas assets British Petroleum was reorganized as TNK-BP.