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ENR Russia Invest SA

ENR Russia Invest SA (“ENR”) is an investment company which is listed on the SIX Stock Exchange. Since 1996, ENR has invested in private equity, real estate, listed equities and fixed income instruments of business operating in the Russian Federation (“Russia”). ENR has also made investments in entities based in other countries of the Commonwealth of Independent States.

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contact(@)enr.ch
+41 22 510 2626

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Events & Dates

Last Shareholders meeting:
26 May 2020

 

Next Shareholder meeting:
Before 30 June 2021 (date still to be determined)

INVESTMENT COMPANY ON SIX STOCK EXHANGE

About us

SIX listed

ENR is an investment company which is listed on the SIX Stock Exchange. It is also a member of the Swiss Association of Investment Companies.

 

Geographical focus

Since 1996, ENR has invested in private equity, real estate, listed equities and fixed income instruments of business operating in the Russia. ENR has also made investments in entities based in other countries of the Commonwealth of Independent States.

 

Private equity investments

The main investment focus is on Russia. It is the largest country in the world by landmass (+/- 17 million square kilometers); the largest consumer market and population in Europe (+/- 145 million people); has the largest natural gas reserves and gas exports in the world; is one of the largest crude oil and refined petroleum products producers; large Gross Domestic Product (top 10 – 15 in the world); a strong country balance sheet where external debt measure against GP is below 15%  and Russia’s foreign reserves are in excess of USD 500 billion (4th largest in the world) ; many interesting infrastructure development projects and good economic fundamentals and growth potential.

 

We invest in Russian businesses with products and/or services substituting imported products (for example, consumer businesses in stable and growth segments of the economy) as well as quality real assets generating healthy cash flow generation. Selectively, we will also consider business with support services or products linked to infrastructure development projects. Our investment focus is long term. We actively support and help management teams to develop and grow the businesses we invest and to improve profitability and cash flow generation (and optimise financing and capital structures).

 

Typically our investments range between CHF 5 million and CHF 10 million (pre-leverage). However, our investments can also be larger or smaller, depending on the particular investment opportunity and ongoing funding requirements for the business we invest in.

 

We will only invest if we are able to partner with strong and committed management teams and, where appropriate, with strong and reliable local partners. We take controlling or large minority interests in businesses (for minority interests we have protections built into the charter or by-laws of the companies we invest in and in the shareholders agreements). We take-up board representation where we play an active role and make sure we have meaningful oversight of accounting and reporting functions and cash management.

 

On exited investments we have generated internal rates of returns ranging from 17% to 83% and 1.8 times to 9.2 times on a cash on cash basis for invested capital (see section – Our Track Record).

 

Listed equity investments

From time to time we also invest in listed equities of mainly large listed Russian companies where we usually have a mid-term investment horizon.

 

Fixed Income investments

At times when our cash resources have not been not fully invested in private equity and/or listed equities, we invest in fixed income investments in large listed Russian companies (usually investment grade) where we have a shorter investment horizon to maximize returns on our cash resources.

INFORMATION

Company details

Informations
Company and Address
ENR Russia Invest SA, Rue du Rhone 118, 1204 Geneve, Switzerland.
Auditors
BDO SA (from 15 June 2017 onwards)
Management fee
1.5% of average net asset value ("NAV") (plus VAT, if applicable).
Performance fee
On disposal or refinancing of a portfolio investment, a performance fee equal to 17.5% (plus VAT, if applicable) of the total net profit (sale proceeds less acquisition costs and transaction costs) realised on such investment, provided that a hurdle rate of 8% per year was achieved.
Costs and expenses
ENR will reimburse Valartis International Limited who renders asset management services for all costs and expenses reasonably incurred in the discharge of its duties.
NAV
Produced quarterly. Published on this website and from January 2014 also released as an ad hoc announcement after each calendar quarter.
Attributable NAV per share
CHF 14.65 as of 31 March 2020
Reporting
Please refer to the reporting section of this website.
SWX listed company and share details
Swiss Security Number: 3447695
ISIN Number of the shares: CH0034476959
Ticker Symbol of the shares: RUS
Number of issued shares: 2'644'402
Number of votes attached to these shares: 2'644'402
Type of shares: Bearer shares
Date (Most recent year-end): 31 December 2019
Latest Shareholders Meeting
26 May 2020 (Date of next shareholder meeting to be defined)
Latest Full Year Results: 2019
Released on 7 April 2020
Next Interim Financial Results: 2020
Before end August 2020

Asset managment services provides – Valartis International Limited, B.V.I., P.O. Box 3340 Dawson Building Road Town,Tortola, British Virgin Islands

EXECUTIVES

Board and Directors

Name
Year of birth
Nationality
Position
since
Gustav Stenbolt
1957
Norwegian
Director
2007
Walter Fetscherin
1945
Swiss
Director
2007
Name
Year of birth
Nationality
Position
since
Ben de Bruyn
1966
South African
Chief Executive Officer
2014

Board of Directors

Gustav Stenbolt

Born 12 August 1957. Lic. rer. pol., University of Fribourg. From 1 March 2017, Mr. Stenbolt assumed the functions of delegate of the Valartis Group AG board for the Valartis Group AG. Since 2015 he has been the Chairman of the Board of the Valartis Group AG. From 2007 until 2015 he was the Chief Executive Officer of Valartis Group AG. He was Chairman of the Executive Board of Jelmoli Holding from 2004 to 2007. From 1996 to 2004, he was CEO and founder of the MCT group in Geneva. MCT merged with OZ Holding in 2005. The merged entity was renamed Valartis Group in 2007. From the period 1983 to 1996, Chief Investment Officers of Unifund for Asia, Latin America and Eastern Europe/CIS. Gustav Stenbolt is member of the board of Eastern Property Holdings Limited.

Walter Fetscherin

Born August 18, 1945. Swiss citizen with Zurich as his place of origin and Meilen, Switzerland, as his domicile. Dr. Fetscherin studied at the Law Faculty of the University of Zurich, Vienna and Heidelberg, including a doctorate of Law from Zurich University. In 1973 he joined the Swiss department of Foreign Affairs and has since served in diplomatic postings in Poland, the USSR and Canada. He was Swiss Ambassador to South Korea, the Czech Republic and until 2003 he served as Swiss Ambassador to Russia, Kazakhstan and Turkmenistan (and Armenia, Azerbaijan and Georgia for one year). He is currently a member of the board of the MC Russian Market Fund and other private companies. Dr. Fetscherin is also President of the Joint Chamber of Commerce (JCC, Switzerland-Russia, Ukraine, Kazakhstan, Belarus and Kyrgyzstan) and Chairman of the Advisory Board of Nestle Russia LLC.

Chief Executive Officer

Ben de Bruyn

Mr. de Bruyn was appointed as Chief Executive Officer of ENR Russia Invest SA with effect 1 January 2014. Prior to this he was employed from July 2006 with Valartis Asset Management SA with the responsibility for private equity transactions. Mr. de Bruyn has more than 20 years of ­experience in merger and acquisitions, capital raisings, privatisations and group restructurings. Previously, he led the corporate finance division of Brait SA, a South African private equity and ­investment group where he was involved in a number of private equity transactions, including leveraged buy-outs of listed companies. Before this he worked for the capital markets team of Absa Bank Ltd and in the corporate banking division of First Rand Ltd. He holds business and legal degrees from the University of Stellenbosch, South Africa as well as a postgraduate diploma in taxation from the University of Johannesburg, South ­Africa. In 1993, he was admitted as an attorney of the High Court of South Africa.

ENR RUSSIA INVEST SA INVESTMENT GUIDELINES

Overview

1. Investment Objective

To invest in private and public companies across different industry sectors as well as the real estate sector and to do so predominately in Russia and other Commonwealth of Independent States countries and in the Baltic States and to manage the asset portfolio to achieve long term capital appreciation on invested capital.

2. Investment Policy

The investment philosophy is growth-oriented and the focus is primarily on longer term strategies and capital appreciation. However, from time to time there may be certain investments which have a shorter investment horizon, reflecting specific opportunities or taking account of prevailing market conditions. At times the asset portfolio may comprise entirely of cash or cash equivalents.

3. Investment Instruments

Investments will be done primarily through equity and/or equity related and/or debt instruments or derivatives instruments.

 

Where capital resources have not been not fully invested, same may be invested in a range of investment products, money market instruments, investment instruments issued by governments, financial institutions or companies, denominated in the currency of the country where investments are made or in any freely convertible currency. The company may take temporary defensive positions if the investment manager determines that opportunities for capital appreciation are limited or that significant diminutions in value may occur.

 

From time to time all or part of risks associated with investments may be hedged through the defensive use of derivative transactions, including, but not limited to, futures, options, swaps or any combination thereof.

 

From time to time leverage may be used in a manner commensurate with reasonable risk management to achieve investment objectives.

4. Investment Process and Factors considered

While investment criteria may vary depending upon the type of transaction, factors taken into consideration when analysing potential investments include:

 

      • Attractive valuations and purchase prices;
      • Strength, depth and commitment of the management team;
      • Existence of a coherent and realistic long term business plan;
      • Relevant asset values;
      • Corporate governance issues;
      • Identifiable exit strategies;
      • Risk management; and
      • Active post-acquisition investment approach

 

Investment opportunities will be identified and analysed by the investment manager or its delegates or agents within the framework of the investment guidelines. The investment manager or its delegates or agents will manage the screening process and, inter alia, conduct interviews with management and owners with the objective of aligning differing interests. The investment manager’s responsibilities include valuations, market analyses, competition analyses, debt capacity calculations, bid tactics, tax optimizing holding structures, financing structures, raising of debt finance, management incentives, personnel reinforcements required, due diligence processes and the intended exit strategy.

 

Day-to-day investment decisions will be made by the investment committee in accordance with the investment guidelines, as determined by the board of directors.

5. Amendments

The investment guidelines may be amended by the board of directors at any time, in whole or in part. Amendments will become effective upon their approval by the board of directors (after expiry of any notice period for regulatory publications which may be required). The company may from time to time impose further investment restrictions, compatible with or in the interest of investors, or, in certain circumstances, in order to comply with relevant country laws and regulations.

Updated with effect 26. November 2016.

OUR PRIVATE EQUITY INVESTMENTS

Investment Portfolio

ST PETERSBURG, RUSSIA

Petrovsky Fort Office Centre

During October 2014 ENR acquired the Petrovsky Fort office centre in St Petersburg, Russia (“Petrovsky Fort”).

 

Petrovsky Fort is a high-quality office center with a total area of 47,600 s.qm, located in central St. Petersburg near the embankment of the Neva River. There are 9 office and 2 retail levels with a large central atrium. Of the total net rentable area, approximately 15’000 square meters are designated for office use and about 6’000 square meters as retail space. There is also an underground parking facility with 119 parking spaces and above-ground parking for 36 cars.

 

The business center was completed in 2003 and modernised in 2010 (air & ventilation systems, lobby reconstruction). As part of the  ongoing capex program to continuously improve the business center and where offices and retail areas are renovated each year. Recently all windows were repaired or replaced and low energy lights were introduced.

 

The business Center has a proven and relevant business concept offering smaller offices and flexible leasing alternatives to small and medium size businesses. It also has office and retail space for larger tenants. On the 2 retail floors there are a number of businesses offering services and food and beverage offerings to tenants and visitors of the building.

 

There is good transport access from city centre and surrounding districts (bus; tram and metro) and it is situated close to the Finlyandsky railway station. It has convenient pedestrian access and the nearest metro 900 metres from the building.

 

A Saint-Petersburg based operational management team is experienced and the core team has been the same for past 14 years and has managed the business centre successfully through a few challenging economic cycles. The property manager,Valartis International in Russia, has more than 20 years of experience in managing Russian real estate investments & developments (> US$ 1 billion).

MOSCOW, RUSSIA

Turgenevskaya Parking Garage

In July 2017 ENR acquired a 50% interest in the Turgenevskaya parking garage at Turgenevskaya square on the Boulevard Ring in the central business district in Moscow, Russia.

 

 

The parking garage was opened in January 2012 and has a gross built area of almost 10’000 square meters, with 297 parking lots (18 above ground and the rest in 6 levels underground).

 

 

Parking lots are leased to corporate clients and to individuals and on an hourly basis for other users. There are several business centers and retail properties in the surrounding area (including the Lukoil head office), with 3 subway stations within close walking distance.

 

 

Over the past few years market trends in Moscow improved meaningfully for parking garages as Moscow city authorities are now charging for parking and introduced strict legislation and enforcement measures to curb illegal parking, meaningfully reducing illegal parking, The city also introduced a street closure program to create pedestrian traffic zones where many surface parking place were removed, leading to increase demand for paid parking facilities.

KALUGA OBLAST, RUSSIA

Kaluga Flower Holding LLC

ENR, via a wholly owned subsidiary, acquired a 50% interest in a 27.4 hectare greenhouse and engineering facility for flower growing in the Kaluga Oblast in Russia (“Flower Growing Facility”). ENR teamed-up with a Russia based investment group, who owns the remaining 50% interest (collectively the “Investors”).

 

The purchase price and initial investment for capital and operational expenses is RUB 742 million (approximately CHF 11.5 million). ENR’s 50% contribution is RUB 371 million (approximately CHF 5.75 million). Together with further investments (see below), it is anticipated that the Investors could ultimately invest a total of about CHF 20 million (or less if low interest rate Russian bank funding can be obtained under Russian agricultural incentive programs). Investor contributions will be made via a combination of equity and shareholder loans.

 

The Flower Growing Facility is well engineered and equipped with 5 stand-alone greenhouses (the largest greenhouse is 100’000 sq.m). Each greenhouse has gas driven combined cycle generators and heating systems, water treatment and distribution systems as well as flower growing and harvesting machinery and equipment (mainly Dutch manufactured). The Flower Growing Facility was not operational for several years whilst under the control of the Russian Deposit Insurance Agency. Further investments are required to service or replace parts of engineering equipment, to buy flower plants and bulbs and to part fund operations until the business is cash-flow positive. It should take two to three years to bring back the Flower Growing Facility to full capacity and a strong management team has been appointed to drive this process, together with the Investors.

 

It is an objective to become the leading grower and seller of quality roses and seasonal flowers in Russia. Over time roses will represent some 55% of total grown flowers. Gerberas and a range of seasonal flowers, including tulips, will make-up the rest of the flower mix. In Russia demand for flowers remain strong and 80% of cut flowers are imported. Russian grown flowers will be a substitute for imported flowers and the Flower Growing Facility (located some 135 km from Moscow, Russia’s largest flower customer market) will have a shorter and less expensive route to market compared to imported flowers and also compete on quality and have longer shelf lives.

 

The focus will be on strong cash-flows generation within a reasonable time period, to introduce operational efficiencies, to improve profit margins and returns for the Investors. Strong corporate governance and financial reporting control structures and processes will be put into place.

 

The main brand name under which Kaluga Flower Holding LLC markets and sells its flowers is called ‘Florentika’

Our Track Record

Eastern Property Holdings Limited

A SIX listed real estate investment and development company listed who focused on project development with the management of rented office, residential and commercial properties in prime locations in Russia at that time. The investment was sold back to management. Main exited via a sale to a third party buyer group and remaining exit via smaller asset and cash realization processes linked to the completion of real estate development projects.

Numbers
Year of Investment:
2008 and 2009
Exit:
2012
Total investment:
USD 13.84 million
Total cash realised:
USD 29.66 million
Equity Interest:
11.57%
Multiple on cash invested:
2.1
IRR:
17.3%

Naftrans/ Transterm

Operated the Batumi oil terminal in Adjaria, Georgia on the Black Seacoast. Provided expansion capital to fund growth strategies. The business provided oil and oil related product rail forwarding in Georgia to the Batumi oil terminal and transshipment and storage of these products at the port. Main exit via sale of the Georgian based operations to the KazMunaiGas group for cash and remaining exit via smaller asset and cash.

Numbers
Year of Investment:
2003
Exit:
2008
Total investment:
USD 30 million
Total cash realised:
USD 54.8 million
Equity Interest:
22.6%
Multiple on cash invested:
1.8
IRR:
25%

Romanov Dvor II

Two Class A office and retail buildings in the Romanov Dvor complex well located in the center of Moscow, situated close to the Kremlin. The last of these buildings were completed in 2006 and both (combined gross area of 37’200 square meters and a total rentable area of 23’657 square meters. The investment was sold back to management.

Numbers
Year of Investment:
2003
Exit:
2008
Total investment:
USD 7.7 million
Total cash realised:
USD 35.1 million
Equity Interest:
17.53%
Multiple on cash invested:
4.6
IRR:
58%

Mossmart supermarket chain

Russian retail chain which operated hypermarkets and smaller store formats. Provided expansion capital to fund growth strategies. Exited the investment in in 2007 as part an ENR group reorganization where the asset was transferred to another SIX Stock Exchange listed entity.

Numbers
Year of Investment:
2004
Exit:
2007
Total investment:
USD 26 million
Total cash realised:
See reorganisation
Equity Interest:
10%
Multiple on cash invested:
See reorganisation
IRR:
34%

Redberry Resources – Azerbaijan Steel Smelter

A steel smelter and pipe factory plant in Azerbaijan. Due to an export ban on steel scrap in Azerbaijan, prices were much lower than world prices (i.e. to invest in a new steel smelter at the plant and use steel scrap resources to set up a steel pipe export business). Funded feasibility stability and assisted with structuring of the project to attract third party investors. Due to a changing legislative environment exercised a put option to exit and sold back our shareholding to the majority shareholder.

Numbers
Year of Investment:
2004
Exit:
2006
Total investment:
USD 1.3 million
Total cash realised:
USD 2.6 million
Equity Interest:
Minority
Multiple on cash invested:
2x
IRR:
26%

Troika Dialog

Troika was a full service Russian investment bank. After the 1998 financial crisis it had emerged relatively unscathed and was ready to take advantage of the collapse of many local investment banks and the withdrawal of global investment banks from Russia at that time.  The business had a strong management team who wanted us to share our asset management and operational experience to grown this business in Troika.

Numbers
Year of Investment:
1999
Exit:
2006
Total investment:
USD 3.6 million
Total cash realised:
USD 33.2 million
Equity Interest:
5%
Multiple on cash invested:
9.2x
IRR:
43%

Bravo Breweries

A Saint-Petersburg based brewery was developed from a ‘brown fields’ plant in 1998.  We provided expansion capital to fund growth strategies. The brewery rapidly became one of the top ten breweries in Russia due to a good product and strong branding and distribution strategies. Sold to the Heineken group.

Numbers
Year of Investment:
2000
Exit:
2002
Total investment:
USD 4.5 million
Total cash realised:
USD 15 million
Equity Interest:
5%
Multiple on cash invested:
3.3x
IRR:
83%

Syktyvkar Group

Syktyvkar is a large integrated pulp and paper business in Russia. We partnered with Baring Vostok and Capital International and provided expansion capital for improvements in the production plant so that it could produce a high quality coping paper (for primarily export markets). The improvements were successfully made and it became a very profitable business for Syktyvkar. Sold to Mondi, an Anglo American Plc group company.

Numbers
Year of Investment:
1997
Exit:
2002
Total investment:
USD 2.6 million
Total cash realised:
USD 18.8 million
Equity Interest:
4.2%
Multiple on cash invested:
7.3x
IRR:
56%

AN INSIGHT INTO THE BUSINESS PERFORMANCE OF THE COMPANY

ANNUAL REPORTS

In order to provide all shareholders, investors and other capital market participants with an insight into the business performance of the company, ENR Russia Invest SA publishes it’s annual report in April each year and a half-year report at the end of August each year.

 

Our current annual report and the archived annual and interim reports are available for download in electronic form (you need a current version of Adobe Acrobat Reader: Adobe Acrobat Reader).

Business year 2020
Annual Report 2019

Business year 2012
Interim Report H1 2012

Business year 2003
Annual Report 2003

Business year 2002
Annual Report 2002

Business year 2001
Annual Report 2001

Business year 2000
Annual Report 2000

Business year 1999
Annual Report 1999

Business year 1998
Annual Report 1998

Business year 1997
Annual Report 1997

AN INSIGHT INTO THE BUSINESS PERFORMANCE OF THE COMPANY

Press Releases

We provide press releases to members of the news media, clients and other people with interest for the purpose of providing information, an official statement, or making an announcement.

 

Our press releases are available for download in electronic form (you need a current version of Adobe Acrobat Reader: Adobe Acrobat Reader).

CONTACT

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ENR Russia Invest SA
rue du Rhône 118
CH-1204
Geneve
Switzerland

Contact Person: Ben de Bruyn, Chief Executive Officer
Tel: +41 22 510 2626
E-mail: contact@enr.ch