VTB acquires First Freight Company based on valuation over 200 bln rubles, including debt - Kostin

VLADIVOSTOK. Sept 5 (Interfax) - VTB has acquired Russia's largest railway operator, First Freight Company (FFC), VTB President and Board Chairman Andrei Kostin told reporters on the sidelines of the Eastern Economic Forum (EEF) 2024.

"We have already bought [FFC]. We generally have the principle that we try not to hold on to non-core assets for long; so now we will look, while it is ours, and management there is ours. There was a large loan there," Kostin said in response to plans regarding FFC.

"Yes, we have acquired FFC in a monetary operation," Kostin told Interfax, also saying that, "We will continue to look, and we will look for the most efficient forms," in response to what VTB plans to do with the asset.

The Kommersant publication, citing its sources, reported in August that FFC was transferring to VTB management.

In November 2023, JSC Aurora Invest bought out FFC from the entities of NLMK owner Vladimir Lisin. The owners of the latter have not been disclosed. The publication's sources in the market said that this involves a group of investors, including the co-owners of JSC Vector Rail, which owns the liquefied petroleum gas transportation operator, SG-Trans, namely Timur and Ruslan Babayev. The Babayevs are the sons of the former vice president of Russian Railways, Salman Babayev, who is chairman of the board of directors of FFC. Ruslan Babayev then became CEO of FFC. Oleg Romanov, a former employee of Russian Railways, currently heads the company.

The sources have estimated the deal to be around 220 billion rubles, with some estimates being higher. Aurora Invest financial statements indicate that the company spent 243 billion rubles to purchase shares or stakes in 2023, and received a comparable amount as loans and credits.