Events 2022-06-15T06:54:40+03:00
Ukrainian news
Why Zhukov and Ratskevich sold Rostdorstroy?

Why Zhukov and Ratskevich sold Rostdorstroy?



A well-known road-building company, Rostdorstroy, has changed its owners. Ex-father-in-law of Russian oligarch Roman Abramovich, Oleksandr Zhukov, and Oleksandr Ratskevich have sold it to Yevhen Konovalov and Yurii Shumakher.

This follows from a recent interview of Yurii Shumakher given to the Focus magazine. In it he said that the company had been sold by Zhukov and Ratskevich on good terms by installments.

What could possibly become a reason to sell one of the most successful road-building companies in Ukraine: unwillingness to do business amidst unstable political situation, criminal proceedings (pretrial investigations) against Rostdorstroy or insignificance of the company itself for the empire of Oleksandr Zhukov? At the same time, one should not disregard the fact of possible fake transfer of the title.


We have failed to get in touch with Oleksandr Zhukov, however, to our surprise his partner, Oleksandr Ratskevich, agreed to answer our questions. Before getting to the text of the interview itself, first of all we would like to provide the reader with certain background information.


Who is who?


At present the open register of the Justice Ministry of Ukraine mentions citizens of Ukraine, Yevhen Konovalov and Yurii Shumakher as the ultimate beneficiaries of the Rostdorstroy company. They have been top-managers of the company since its foundation in 2005. Following the deal with Zhukov and Ratskevich the company came under their comprehensive control.


Yurii Shumakher is a member of the Odesa City Council and a member of the pro-city mayoral party called Trust In Deeds. That is why Odesa City Mayor Hennadii Trukhanov was constantly accused of being biased during conduction of tenders for road repair and practically possessing the company, though the latter could not ever been proved with any evidence.


There is little open information about Oleksandr Ratskevich. According to our sources, he is a person from Zhukov's circle and the head of his company, Interfinance.


Oleksandr Zhukov is the father of a famous Russian designer and collector, Daria Zhukova, who is not a less remarkable person in the global business arena than her former spouse, Roman Abramovich.


Oleksandr Rabkin (took the surname of his first wife, Olena Zhukova) started to build his business-empire in the 1980s. Having established a cooperative called Byte, Zhukov started to sell computes including to state-financed enterprises.

Early in the 1990s, he along with Leonid Lebedev and Mark Garber established the Sintez company that performing in the oil and petroleum products market.


The major Oleksandr Zhukov's pet project was the Interfinance group with its parent company Interfinance Ca headquartered in Switzerland and engaged in investing in different fields such as port infrastructure, oil and petroleum products production, food industry, construction, etc.


Oleksandr Zhukov himself controls his business-empire straight from the United Kingdom.


The Rostdorstroy record

From time to time the company finds itself in the epicenter of scandals, appearing in different pretrial investigations being accused of embezzlement of state budget funds and fiscal frauds.

Rostdorstroy can be considered a large all-Ukrainian company engaged in works not only in Odesa region but also in many other regions of Ukraine. According to the z.texty analytic website, since 2008, the portfolio of Rostdorstroy for road and other works amounted to over UAH 10 billion, of which 33% were supposed for the Automobile Road Service in Odesa region (part of the Ukravtodor state automobile roads agency of Ukraine). The second and the third largest Rostdorstroy's clients are the Automobile Road Service of Poltava region and the Road Economy Department of the Odesa City Council.

Oleksandr Ratskevich resides in the capital of the Republic of Bulgaria, Sofia, which is the reason why we interviewed him on the phone.


Interview with Rostdorstroy's ex-owner


- Were Shumakher and Konovalov the only ones to have controlled the company since its very foundation?

- Yeah. Shumakher and Konovalov were always the key top-managers in the group. Zhukov and I were surely responsible for the issues that were of stockholders' competence: financial reporting approval, dividends, investment budgets, etc.

- Do you or Zhukov know Trukhanov personally?

- Yes. We both know Trukhanov personally. However, we have never had any joint businesses with him despite the tall tales spread by the media.


- What is your attitude to doing business in Ukraine these days? How does the political situation affect the business processes?


- Political situation in any country does affect the business, cost of assets on the whole and the rules of the game for businessmen. Ukraine is no exception and far not the simplest case in this context. Nevertheless, for over 25 years we have done and still do business in Ukraine and our decision to quit the project was more a result of the composition of our portfolio of business assets, than by any local political disturbances.


Frankly speaking, all that the black PR created and spread by different media against Rostdorstroy did not add us any reputation points and was an additional aspect that made us quit the business.


- How much is Rostdorstroy? How close was the deal price to the market one and what principles were the most important for the pricing?


- I won't tell the raw numbers. Our buyers and we signed serious documents that prohibit publishing commercial aspects of the deal. However, the notion of a market price is the territory of theorists and analysts. The Rostdorstroy's shares are not listed at any stock exchange, even if they had been, it would still have been wrong to judge about the market price of the company by its exchange quotations. For me as well as for many other businessmen, the crucial parameter that influences on the asset cost is its liquidity.


Unfortunately, Rostdorstroy is rather a low-liquid asset which means it costs not more than someone is ready to pay for it. All other smart talks about so-called multipliers to the EBITDA, goodwill appraisal, etc. have nothing to do with the asset no one wants to acquire. This was exactly what we faced when we tried to sell the company.

It is obvious that there is always the lowest price threshold for such a business: the assessment of the market value of the equipment, factories and machinery of the company minus external debts. To put it simply, how much money one can get by collecting all the receivables after selling all road machinery, equipment and factories. Obviously we sold the company to Shumakher and Konovalov for a price higher than that.


- Was the National Anticorruption Bureau's (NACB) investigation a reason for the sale?


- The fact of the investigation itself was not the reason. We are self-confident and do know that the data possessed by the investigators that allegedly point to the interconnection between Rostdorstroy and Trukhanov, mildly speaking, is not true and in some instances can be called an absolute nonsense.


The NACB has held its investigation for many years that touched many our companies including the ones based abroad. They have found no and cannot find any evidence. There is not such a thing at all.


I will repeat myself and say that the fact of the investigation and some inconveniences related to it do not trouble us much. The NACB is surely a respected and professional organization, and I do hope they will puzzle everything out and we, of course, are always ready to assist.

We are more concerned about the whole negative information spread by some of your colleagues. They seem to intentionally create negative information about the company referring to the said investigation.

I am not a proponent of any conspiracy theories sort of confederacy of some rivals or other enemies of Rostdorstroy. Most probably, numerous negative news articles are in fact targeting Trukhanov basing on a legend about inextricable connection between the city mayor and Rostdorstroy foisted on the people.

In other words, unpleasant is not the fact of the NACB's investigation itself, but the side effect in particular, negative information about the company spread by the media.

- How much have you gotten from Shumakher and Konovalov after handing the control over Rostdorstroy over to their Hungarian company?

- I will not disclose the figures due to the aforementioned reasons. We have received the first tranche that triggered the mechanism of a huge and complicated transaction. Most of the price will be paid by installments.

- Why did you agree for the installments? What are the conditions and for how long will the installments be in force?

- I have already said there simply were no buyers ready to pay the whole price at once. In our opinion it would not be correct to sell the asset to some strangers using the mechanism of installments.

The machinery is the security. Business reputation and professionalism of the buyers and their managers are the security for us to receive all the money in the end.


We have worked with Yurii and Yevhen in the Sea Transport Bank since 1995. We can rely on them. The installment payments will last for a long time and the terms envision accrual of the market interest on the remaining debt.


- How is the installment security realized? What will happen if Shumakher and Konovalov stop paying?

- The agreement obviously provides for various scenarios. Suffice it to say, and I believe I won't disclose any big secrets, the basic scenario of the transaction envisions separation of, essentially, a leasing company from the structure of Rostdorstroy from the group.


That separated company will collect all the machinery to later be leased to Rostdorstroy of Shumakher-Konovalov for a long period of time with its further full buyout.


We will reserve our control over the leasing company until the accounts are settled in full. And now, what will happen if Shumakher and Konovalov stop paying? Everything depends on a possible reason? Let's not talk about anything bad. I am sure the guys will manage to pay. They had earlier managed with the business well and now their motivation is beyond all reasons.

- What assets does Interfinance still have in Ukraine except Rostdorstroy and what is going to happen with them next? Isn't it unreasonable to assume that they all will be sold?


- Nowise! Firstly, there are strategic assets and they will be retained. There are also a number of residential and commercial real estate facilities, land plots being sold, however, that not even close can be called a panic-sale. We will retain a small insurance company, a spa-complex and an office center in Ukraine.

- Has not such a large-scale business as Rostdorstroy been added into the category of strategic businesses?


- It was our only asset engaged in the road building. Besides, its share in the overall portfolio of Interfinance was about 3% in compliance with the latest portfolio's assessment conducted for international financial institutions early this year. Judge for yourself…


Something like an epilogue


The fact that Zhukov and Ratskevich sold Rostdorstroy to their long-standing partners Shumakher and Konovalov does not mean that the former owners of the company lost their levers to influence on the asset.


Zhukov and Ratskevich are no longer ultimate beneficiaries of Rostdorstroy. However, they will continue owning the company until Shumakher and Konovalov pay all they owe for the road building machinery and the key assets of the enterprise.


What was the reason for such a fake deal? Probably that was done in order to draw Zhukov and Ratskevich from under certain reputation risks for the case of possible criminal proceedings against Rostdorstroy's top-managers (Shumakher and Konovalov) the threat of which is increasing in viewthe forthcoming presidential and parliamentary elections in 2019. As usually, on the eve of any elections, Ukrainian higher-ups start struggling for financial flows as a result of which large companies and entrepreneurs always become their victims. And Rostdorstroy is in the "high-risk group" due to its alleged association with the Odesa city mayor imputed to it.

All the more the change of the ownership took place on the eve of the presidential election! Of course that might have been a mere coincidence.

On the other hand the Oleksandr Ratskevich's position is very substantiated. Zhukov-Ratskevich overgrew the frames of the Ukrainian business long ago. They are now the members of the global market. Given this, Rostdorstroy really created problems for Zhukov and Ratskevich due to permanent scandals that made them get rid of the 'toxic' asset.

The sale of the Rostdorstroy's property through a leasing scheme is just a comfortable transaction type.





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