Flash Report /
Russia

Gazprombank to transfer a 45% stake in MFT to Gazprom-Media – POSITIVE

  • Russian media reports that Gazprombank will transfer a 45% stake in MF Technologies (MFT) to Gazprom-Media’s capital

  • VK officially reported that Boris Dobrodeev has decided to step down as CEO of VK (Russia) and will leave the company

  • RBC reports citing an undisclosed source close to VK that Vladimir Kirienko would be apponted to this position

Anna Kurbatova
Anna Kurbatova

Senior Analyst, TMT & Agro

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Alfa
3 December 2021
Published byAlfa
  • Russian media, citing Gazprom-media, reports that Gazprombank will transfer a 45% stake in MF Technologies (MFT) to Gazprom-Media’s capital. MFT Technologies is a holding company owning a 4.8% economic and 57.3% voting stake in VK (formerly Mail.ru Group) (MAIL LI, O/W, TP USD42.2). According to sources in Gazprom-media “VK continues operating as an independent company and developing its own digital ecosystem”.

  • VK officially reported that Boris Dobrodeev has decided to step down as CEO of VK (Russia) and will leave the company. He will however continue his duties until a new CEO is appointed by the Board of Directors of VK, to ensure a smooth management transition.

  • RBC reports citing an undisclosed source close to VK that Vladimir Kirienko (currently Rostelecom's vice-president) would be apponted to this position. Vladimir Kirienko is the son of Sergey Kirienko, the deputy head of Presidential Administration and former head of Rosatom. He joined Rostelecom as a deputy vice president in 2016 and was responsible for company's digital transformation, development of data center business, the launch of Wink online media platform.

The news means that USM holding (i.e. Alisher Usmanov) has fully exited VK’s capital. Gazprombank accumulated a 36% in MFT from Sberbank (deal closed in November) and 9% from USM directly. Another 45% in MFT will be held by another Gazprom’s affiliate Sogaz and 10% by Rostec. The transfer of decision-making power in VK from Gazprombank to its relevant media leg Gazprom-media is a logical step. What can be said with confidence at the moment is that Gazprom entities are likely to actively participate in VK's key decision making (unlike Usmanov, who delegated his voting right to VK's CEO in 2018) and that further changes to management are imminent.

It is too early, however, to speculate about the new shareholders’ intentions to leverage potential cooperation/integration/synergy opportunities between VK and their own media assets in the future. Such decisions and relevant changes in VK's strategy would require some time and coordination/approval by VK's major international shareholders.Gazprom-media operates nine free-to-air TV channels, 32 thematic TV channels, satellite TV provider NTV+, but has a limited footprint to Internet/digital (Premiere and Rutube platforms). Sogaz holds a 21.22% interest in National Media Group (NMG), which operates four free-to-air TV channels (including Channel 1), thematic channels Discovery and Viasat, more.tv online streaming, Izvestia news holding as well as advertising sales house National Advertising Alliance. 

We expect that the news should be taken positively by investors, who have a strong appetite for change in VK, which strongly underperformed the Russian Internet sector and the broad market LTM. We believe that VK going under Gazprom's control would speed up the asset divorce with Sberbank (O2O JV) and would trigger a major turnaround in the stock.