Volga-Dnepr avoids sanctions

As Kommersant found out, the founder and main owner of the Volga-Dnepr group of companies, Alexei Isaikin, who fell under British sanctions, is withdrawing from the beneficiaries of all its Russian and foreign structures and transferring control to management. According to Kommersant’s sources in the market, this may allow the Western companies of the group to continue working, and Mr. Isaikin himself, who has dual citizenship, to engage in other business, including abroad.

Sources of Kommersant in the aviation market said that Alexei Isaikin decided to completely break ties with the Volga-Dnepr cargo group he created in 1990. This information was confirmed by a representative of the group: “Alexey Isaikin, the founder of the Volga-Dnepr airline, after 45 years of work in the aviation industry, decided to withdraw from the company’s shareholders and transfer management to management with 32 years of unique competence in international air cargo transportation.”

According to SPARK-Interfax, since 2020, Volga-Dnepr Airlines is 49% owned by Volga-Dnepr Logistics BV, registered in the Netherlands. Logistics BV). In the same proportions, these two structures own two other carriers of the group: AirBridgeCargo and Atran. Until now, the parent company of the Volga-Dnepr group has been the Alpine Prosperity Foundation (Liechtenstein) – which, according to the financial statements of the group’s insurance company, was 100% owned by Alexei Isaikin.

The details of the transaction and the new composition of shareholders were not disclosed. According to one version, Volga-Dnepr-Moscow got rid of foreign complicity and will now be fully owned by top managers.

Most often, Kommersant’s interlocutors name three people from the Aviastar plant in Ulyanovsk, with whom Alexei Isaikin launched Volga-Dnepr in 1990: Sergei Shklyanik, Sergei Pedan and Valery Gabriel, who at various times acted as co-owners of the airline. Whether they could, according to another assumption from a number of sources, receive a share in foreign capital is unknown. But such a maneuver, one of Kommersant’s sources points out, does not make sense from the point of view of clearing international structures from sanctions risks.

According to Kommersant’s interlocutors in the market, Alexey Isaikin is withdrawing from the capital of all foreign assets he owns: Alpine Prosperity Foundation, Gloria 7 Sa rl (Luxembourg), Volga-Dnepr Logistics BV (Netherlands), CargoLogic Germany and CargoLogicAir (UK) – after imposition of UK sanctions against him in June in order to reduce the risks for the activities of international companies, avoid the threat of blocking accounts and “continue to work with customers, banks and lawyers in Europe.” British sanctions actually block the activities of all units abroad, another Kommersant interlocutor says: “This fact becomes fundamental to everyone in Western jurisdiction and can lead to refusals to cooperate.”

CargoLogic Germany and CargoLogicAir are air carriers registered by Mr. Isaikin as a citizen of Cyprus. But in mid-March, European aviation authorities banned their flights because the first Russian citizenship was discovered in the businessman (see Kommersant on March 17). The British company operates two Boeing 747s, while the German carrier’s fleet consists of four Boeing 737s, but is now in bankruptcy proceedings.

A number of Kommersant’s interlocutors believe that Alexei Isaikin’s withdrawal from the capital of companies may allow at least the British carrier to resume work and open up “ways to save part of the fleet abroad.” Including, according to one of the sources, the group hopes to resume negotiations with Etihad Airways (UAE) on the creation of a joint venture, which will transfer most of the AirBridgeCargo fleet: “The process is on pause, there was no final rejection of this idea.” Negotiations are also underway with two companies from the EAEU countries “with a small fleet of their own and a good location.” According to a Kommersant source, the company received preliminary consent from the lessor BOC Aviation (a structure of the Bank of China) for relocation and further operation within the framework of new joint ventures. The problem was the lack of permission to export aircraft (see Kommersant of July 1), which has not yet been received.

Now, of all the structures of the group, only the Russian Volga-Dnepr continues to fly, which operates a fleet of 12 An-124-100 and five Il-76TD-90V. According to an interlocutor close to the Ministry of Transport, the average flight time per aircraft is 1.1 thousand hours per month, which “speaks of colossal activity.” The carrier, according to him, performs charter cargo flights, including to India, Bangladesh, China, Vietnam, South Africa, Algeria. According to Flightradar24, five An-124s and five Il-76s operate flights: in addition to the listed destinations and flights around the country, they fly to Israel, Turkmenistan, Kyrgyzstan and Kazakhstan. Including a contract for cargo transportation for 9.5 billion rubles. with “Volga-Dnepr” in the spring signed by the authorities of Moscow. In addition, the company should receive 907.5 million rubles. state support for the “preservation of aviation personnel specialists” (see “Kommersant” dated July 13).

However, against the background of the group’s previous income, these volumes do not look significant. AirBridgeCargo in 2021 received 55 billion rubles. net profit according to RAS, it accounted for more than 40% of all cargo transportation in Russia (first place, according to the Federal Air Transport Agency, 639 thousand tons), Volga-Dnepr – 4 billion rubles. (tenth place in the Russian Federation, 27 thousand tons) and Atran – 267 million rubles. (seventh place, 59 thousand tons).

The other day it became known that AirBridgeCargo and Atran, whose 27 Boeings of various types have been idle since March, will cut about 200 pilots. The exact number of surviving crews is unknown, but in March, Kommersant’s interlocutors in the group said that before the cuts, about 400 pilots worked in the two companies.

In the current situation in the freight market in the Russian Federation, the future profits of the group “are not clearly visible”, and the deal to sell the business “is most likely of a non-monetary nature,” said Igor Smirnov, Senior Director for Corporate and Sovereign Ratings at Expert RA. “The founder of the company is a person devoted to aviation, in this regard, the idea of ​​​​keeping the company in a close environment seems to be a priority,” he believes.

In the current conditions, it is quite difficult to look for logic in near-sanction practices in general, Mr. Smirnov notes, but there is a sense of Alexei Isaikin’s exit from foreign assets: “If foreign parent structures cut off ties with a Russian shareholder, this can be an elegant solution to turn it into a legally pure international player.”

He emphasizes that the group was focused on foreign project cargo transportation, which provided about 90% of its business, and now “look unpromising in the foreseeable future.” But, the expert admits, the group’s competitive advantage lies in the “quite unique” An-124 (Ruslan) aircraft and in the future “may have some value.”

What Alexei Isaikin will do now, neither he nor Kommersant’s sources close to the businessman comment. One of Kommersant’s interlocutors does not believe in the possibility for Mr. Isaikin to “tie up with aviation in general.”

In his opinion, the businessman could organize projects in the field of aircraft construction, “to which he has long shown interest.” Also, the Kommersant source notes, Alexei Isaikin has “strong competencies in aircraft maintenance”, which is now very relevant for the Russian aviation market. Another option he calls the financing of aviation start-ups, for example, in the field of light aviation.

Now the businessman, according to Kommersant’s information, is in Russia. However, Kommersant’s interlocutors also talk about the possibility of launching aviation projects abroad “if desired and taking into account the Cypriot second passport.”

Aigul Abdullina

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