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Andrei Mikonin told about a new turn in the story with shopping and leisure center Pulkovo III

28 February 2012
Money came from Siberia

It seems that the story of shopping and leisure center Pulkovo III will take an inexpected turn. 630 million roubles debts of bancrupt OOO “Uyut”, which owns the project, will be settled by structures owned by Siberian oligarch Mikhail Sutyaginsky.

The shopping and leisure center Pulkovo III totaling to 1.3 billion rubles may go to structures owned by Omsk businessman Mikhail Sutyaginsky, “Yedinaya Rossiya” ex-deputy of the RF State Duma. OOO “Uyut”, which owned the complex, turned bankrupt after assassination of its founder – businessman Mikhail Karachev. Killers have not been found. Reportedly, two years later structures closely connected with business of Mikhail Sutyaginsky agreed to repay the company’s debt amounting to 630 million roubles.

At the end of 1980s Mikhail Sutyaginsky founded a petrochemical group “Titan”, which was ranked number 138 in the Forbes list of the 400 largest private companies in 2006, and rose to number 103 in 2011. Last year, the group revenue exceeded 22.3 billion roubles. Mikhail Sutyaginsky ranked number 356 in “Finance” magazine list of Russian billionaires, his fortune is evaluated at 7.9 billion roubles.

Secretive investor

The Pulkovo III center with trade area of 55,000 m2 located at fast developing commercial area is currently owned by the bankrupt OOO “Uyut”.

At the beginning of February it transpired that debts of the bankrupt company will be settled by OOO BIOM founded by Vladimir Belokon in Moscow in 2010. The said businessman owns ZAO Ekooil (Moscow) selling fuel additive products. A similarly named enterprise is a member of Titan Group (regional strategic complex of petrochemical productions in the Omsk Region). However, the said organization denied relations with communication with the Moscow company Ekooil as well as with Vladimir Belokon, despite the fact that in 2010 Vladimir Belokon, as the head of Ekooil, member of Titan Group, received a commendation of the CIS Interstate Parliamentary Assembly for supporting the Third Neva International Environmental Congress.

Moreover, according to SPARK database, stockholders Vladimir Belokon and Mikhail Sutyaginsky own the KlassMarket Company (Moscow) in equal shares. Vladimir Belokon confirmed to DP that a transaction will be made aimed at settling debts of OOO “Uyut”. However, he made no comments for reasons of this transaction and its details. “It's too soon to say. Too many problems are unsolved,” said the businessman.

At the beginning of February the St. Petersburg arbitration court granted the application of OOO BIOM seeking to settle claims of creditors of OOO “Uyut”. To this effect, BIOM should pass 630 million roubles to notary’s account at the beginning of March and then bankruptcy procedure will end. After the debt buy-back, BIOM will qualify to buy Pulkovo III, the only liquid asset of OOO “Uyut”.

This being said, OOO BIOM is not the only company showing interest in Mikhail Karachev’s estate.

Disrupted plans

The late owner Mikhail Karachev, whose initial fortune was made in gambling, invested his funds in real estate and owned a department store located at Stachek Street and premises in some districts of the city. All these assets were sold up to repay businessman’s debts.

The legitimate heirs, i.e. his wife and two sons, only managed to retain control over the shopping center. However, the latter may be sold to repay debts as well.

In 2010 OOO “Uyut” bankruptcy proceedings started, then last October it was declared bankrupt by the court and winding up proceedings began aimed to sell Pulkovo III to repay creditor indebtedness. The large part of credit debts was consolidated by Prime Advice Company, which repaid the rest of debt to Sberbank amounting to 300 million roubles. Philipp Azarchenkov, Director General of Prime Advice, explained that the company is acting in the interests of third parties; however, he refused to name them.

Therefore, Omsk businessmen’s intention to settle all debts of OOO “Uyut” may upset the plans of unknown structures represented by Prime Advice Company.

Time was…

Pulkovo III opened in 2007 when everyone having plenty of money invested to commercial real estate hoping for a quick payback of investments. “At that time people believed that they just had to construct a project of real estate and customers would flock there”, said Nikolai Kazansky, Director General of Colliers International, St. Petersburg. He believes that Pulkovo III is not a good project from the standpoint of concept.

His opinion was confirmed by Yury Ageev, the former manager of multi-purpose complex: “When I resigned, 70% of the premises were leased out. It was a high quality construction project, and most importantly, it had a good power reserve”. Yury Ageev told us that he resigned because he disagreed with the former owner in relation to the concept of the project further development. However, he did not reveal details about the disagreement.

After Owner's Murder

Pulkovo III has lost most of its tenants. Currently, only 20 % of premises are leased out. The situation is further worsened by the fact that plenty of business and shopping centers emerged near the project recently.

Weak concepts

Reconstruction of Pulkovo airport which started in 2011 will change the airport into a major international hub. This being said, there is not so many free land plots near the airport, suitable for developing commercial real estate. Therefore, good reconceptualization may well give Pulkovo III a second wind. At the same time, new owners will have to scratch their heads to make this project successful despite its problematic aura.

“It is one of the most problematic zones of the city, with tough competition among projects. I have a suspicion that even the big shopping complex Leto faces problems finding tenants,” said Nikolai Kazansky.

Pulkovo III is just one of the projects built in St. Petersburg in the era of pre-crisis investment rush. The majority of such projects erected by novice constructing companies had no well-thought conceptions of development and failed to pass the crisis test. For instance, VEFK, one of the largest banks of St. Petersburg, which ranked fifth among leaders in terms of assets, did a poor job of developing real estate projects. Their debts relating to their own building projects exceeded the volume of assets.

RTM, a Moscow development company, also ended in a fiasco: their unfinished shopping center in Kupchino was taken by Sberbank to compensate for RTM debts


BIOGRAPHY


Mikhail Sutyaginsky

- 1989: founded a petrochemical company “Titan”;

- Today, the Titan Group produces one fourth of Russian synthetic rubber and phenol;

- 2008-2011: deputy of the fifth State Duma of the RF;

- Head of federal project “PARK: Industrial-Agricultural Regional Clusters” in Omsk region;

- Married, has a son and a daughter.


COMMENTS

Who shall pay the redemption fee?

NIKOLAY VECHER,
Director of GVA Sawyer at St.-Petersburg

Pulkovo III definitely has problems with its concept, since it is a leisure center, rather than a shopping center. The complex has a movie theater and billiard rooms, while a shopping mall is not very large. However, it remains unclear, what public it shall cater to. Citizens of St-Petersburg will hardly flock to Pulkovskoye highway just to play billiards or watch movies. As to shopping function of the project, many shopping centers are located much closer to the city. Pulkovo III has nothing special to make people come there instead of some other leisure and shopping center.


ANDREI MIKONIN,
partner of S&K Vertical

At the moment, investor's funds should arrive to notary’s account. After that, moneys will be distributed between creditors. Another sitting of the court will take place on March 2, and we shall see, whether all the creditors had their claims satisfied.

Creditors are not likely to present new demands. Most probably, the investor will purchase shares in this society from the owners, after redemption of debts of OOO “Uyut”. Any other scenario is less probable.



Aleksandr Sologub

Delovoy Peterburg no. 031 of February 28, 2012


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