Tuesday, Jul. 16, 2002. Page 1
There Is a New Billionaire in Town
By Alexander Boreiko for Moscow Times
Vedomosti He may not feel like one, but Vladimir Yevtushenkov is Russias latest billionaire.
Yevtushenkov, the founder and chairman of Sistema, whose top asset is Mobile TeleSystems, has followed the lead of Yukos and Wimm-Bill-Dann and thrown open his holdings books in an attempt to attract foreign investors.
Sistema, which holds stakes in some 200 companies, filed a report of its shareholder structure Friday with the Federal Securities Commission, after completing a revamp.
The report, which was compiled in line with international accounting standards, puts the companys consolidated assets at $1.7 billion as of Oct. 1. The report emphasizes, however, that the figure is on the conservative side and is significantly lower than Sistemas true market value.
Sistema vice president Sergei Drozdov said the holding has assets worth about $2 billion. That means that Yevtushenkov, who holds a 75.96 percent stake in the holding, is worth about $1.5 billion.
Not that Yevtushenkov has had the opportunity to savor his wealth.
"I dont feel like a billionaire because all the money is tied up in the assets of functioning enterprises," Yevtushenkov said. "And the more enterprises there are, the more my personal efforts are required to structure the business and manage these companies [and] the more work I have. That hardly corresponds with the traditional image of a billionaire."
The decision to reveal Sistemas ownership structure was made for foreign partners, Yevtushenkov said.
"Any [foreign] company that works with Sistema on any kind of joint project will always feel more comfortable when it can visualize the ownership structure in its entirety," he said.
The disclosure is also a step toward tapping international capital markets. Drozdov said Sistema is looking to place 2nd or 3rd level ADRs on Western markets within the next year and a half.
Renaissance Capital analyst Alexei Moiseyev said Sistema is the latest corporation to realize that greater transparency can lead to greater investment.
"A new standard of transparency is being created," he said. "Most of the owners of bigger companies are starting to understand that transparency gives them much greater opportunities to increase their market capitalization and, in this way, increase their personal wealth."
Last month, Yukos revealed exactly who owns what in the oil giant. The revelation showed that Yukos CEO Mikhail Khodorkovsky, whom Forbes magazine has named Russias richest man for the last two years, owns 36 percent of Yukos. The companys current market capitalization stands at more than $20 billion, giving him a net worth of $7.2 billion.
Food giant Wimm-Bill-Dann laid out its ownership structure ahead of an initial public offering in New York earlier this year.
Sistema underwent a major overhaul before it released the audit.
The Sistema-Invest company, which previously owned 97.22 percent of Sistema, was merged with the parent company, as was the Moscow Committee for Science and Technology, which held a controlling stake in the MGTS telephone network. After the restructuring, it directly controls 56 percent in MGTS.
In addition to Yevtushenkov with a 75.96 percent stake, Sistema president Yevgeny Novitsky and first vice president Alexander Leiviman each hold 4.8 percent stakes, according to the audit. The head of Sistema Neft and president of Kedr-M, Alexander Gorbatovsky, owns 3.4 percent of the shares, while the general director of Sistema Telekom, Alexander Goncharuk, has 2.9 percent. A further 2.16 percent belongs to the Raison International Corp., a private company.
Sistema is the largest stakeholder in mobile phone giant MTS, which is listed in New York and has a market capitalization of almost $3 billion. MTSs other main investor is Deutsche Telekom.
Its other telecommunications stakes include MTU-Inform, MTU-Intel, Comstar, Telmos and Golden Line.
Sistema also has shares in the Rosno insurance company and retailers Detsky Mir and Bauland, while its oil business is managed by Sistema Neft. Sistema Neft controls the Kedr-M chain of gas stations and three oil deposits in the Komi republic. The company has reserves of about 13.5 million tons.
Sistema operates the Moscow Bank of Reconstruction and Development and has extensive media assets, including the Maxima communications group, Public Press, Radio Center and the Metropolis publishing house, which prints the daily newspapers Rossiya, Metro and St. Petersburg-based Smena as well as the Kultura and Literaturnaya Gazeta weeklies and the Voyazh i Otdykh magazine.