Kerimov Consolidates 45% PIK Stake

PIK Group founders Kirill Pisarev and Yury Zhukov were left with 33 percent of the company’s stock after billionaire Suleiman Kerimov consolidated his control over 45 percent of the company.

As of Jan. 1, Pisarev and Zhukov owned 74 percent of the firm’s voting shares. In April, Lacero Trading, controlled by Kerimov’s Nafta-Moskva, acquired 25 percent of the company. The price of the deal wasn’t disclosed, but PIK managers told Vedomosti that Kerimov received 25 percent of the company in exchange for a promise to restructure its debt.

In November 2008, PIK announced that it was having trouble repaying its loans. The group’s debt was $1.3 billion, of which $900 million had a term of less than a year, and apartment sales had dried up. By June 30, the founders owned about 33 percent of the firm, the company said in a report on its first-half results.

Pisarev and Zhukov said via their representatives that they wouldn’t discuss the topic, and representatives for Nafta-Moskva and PIK Group declined to comment.

A PIK manager said a 16 percent stake went to entities controlled by Nafta-Moskva.

In May, PIK said Pisarev and Zhukov had 49 percent of the firm, without clarifying their respective stakes. At that time, the Federal Anti-Monopoly Service permitted Lacero Trading to buy an additional 20 percent.

PIK managers said Pisarev and Zhukov had an option to buy back the shares within two to three years.

Firms controlled by Kerimov already own 45 percent of PIK, said sources close to Nafta-Moskva and PIK. A former PIK manager said the founders’ stake was already less than the announced 33 percent.

In June, Cyprus-registered Holborner Services Limited, which hadn’t owned any shares in PIK, acquired 6.3 percent of the group.

With the participation of a new shareholder, the situation in PIK has begun to improve.

The group said its biggest creditor “expressed a willingness” to restructure 14 billion rubles ($486 million) of debt. The period of the loan will increase to five years with payment deferred for 2.5 years followed by equal quarterly payments.

In September, a government commission approved state guarantees to PIK and PIK-Region for 14.5 billion rubles. Executives said their total loans will be twice the amount of state guarantees.

As the financial situation stabilizes, PIK’s market capitalization is growing. Since Nafta-Moskva’s stock purchases were announced, PIK’s stock price has grown more than 200 percent, and a 20 percent stake, which the founders have an option to purchase, now costs $410 million.