In 2020 the debt of Albert Avdolyan’s A-Property skyrocketed from 13.5 billion RUR (178.4 mio USD) to 152.2 billion RUR (2.1 billion USD). The increase in accounts payable of the company resulted from the purchases of assets for 142 billion RUR (1.8 billion USD) in total.
In April 2020, A-Property acquired 51% in Elga from Igor Zyuzin’s Mechel for 89 billion RUR (1.17 billion USD). Elga is one of the largest coking coal deposits in the world with overall reserves of 2.2 billion t (according to JORC classification). In December 2020, A-Property purchased additional 49% in Elga from Gazprombank, consolidating the project. The transaction amounted to 45 billion RUR (615.9 mio USD). In 2020, Elga coal production reached 6.73 mio t (+2.41 mio t or +56% to Jan-Dec 2019). In February 2021, A-Property signed an agreement with Alltech Group on the main terms of acquisition of Sibanthracite Group, belonging to the heirs of Dmitry Bosov, for 1 billion USD (see CAA Russian Coal Weekly dated February 12, 2021). Sibanthracite is a world leader in the production and exports of high-quality anthracite, with total output of 17.3 mio t in 2020 (-5.7 mio t or -25% to 2019).
Rostec, a Russian state holding, is a major partner of A-Property. Both companies control port Vera coal terminal in the Russian Far East and Ogodzhinsky coal field. In March 2021, Rostec signed an agreement with A-Property on the main terms of the transfer of 5% in the Elga coal project to the state corporation.
Given ambitious plans of A-Property to ramp up production volumes at Elga to 45 mio t and at Ogodzhinsky coal deposit to 10 mio t by 2023, the company will need additional funds on the development of assets. In March 2021, Elgaсoal, the company responsible for the development of Elga, pledged coal worth 2.06 billion RUR (26.4 mio USD) to Gazprombank. The pledge is thought to ensure the fulfillment of the coal producer’s obligations under the credit agreement concluded between Elgacoal and the bank on December 01, 2020.
Source: CAA Analytics
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