Wednesday, March 11, 2009

Omani State Reserve Fund, the secret partner, and the Balkan Investments - part 2


Who is The Omani State General Reserve Fund's mystery partner?


When Oman's State General Reserve Fund snapped up control of Equest Investments Balkans Ltd, their UK listed partner in a 600 million euro Bulgarian Ski resort deal (see previous post), while conveniently outside the reach of the UK's Code of Takeovers & Mergers (which would oblige disclosure of owners I bet),

The Board notes that State Street (Nominees) Limited, as nominee for SGRF, currently holds 5,894,834 ordinary shares of no par value in the Company ("ordinary shares") (representing 32.27% of the issued share capital of the Company) and funds managed by Kairos own 3,743,866 ordinary shares in the Company (representing 20.50% of the issued share capital of the Company). SGRF and Kairos together control 52.77% of the issued share capital of the Company.

The Company is incorporated, and has its registered office, in the British Virgin Islands and has its ordinary shares only admitted to trading on the AIM Market of the London Stock Exchange. Accordingly, the Directors do not believe that the Company is subject to the provisions of The City Code of Takeovers and Mergers.




it still meant that according to the AIM stockmarket rules, the new Directors had to list their other Directorships and post a very short bio, which makes interesting reading (see end of post).



Before we dive into those detailed directors interests filings, to me it does look like Oman got a very interesting company in the firesale of the crisis, and as their partner in the ski deal, it probably had to be rescued anyway. After all, whats 20 mln euro against a 600 mln deal, for the SGRF? Bargain!!!

Here's a synopsis of EIB ( in their own words):
Equest Investments Balkans Limited (EIB) currently has ten companies – in Financial Services, Retail, Waste Management and Land and Property Development, predominantly with majority equity holdings. Its principal focus is on Bulgaria and Romania, but considers appropriate investments in the rest of the Balkan region.

Unfortunately, their super-cunning investment strategy was to leverage everything like crazy.
As part of our investment strategy, Equest borrows from commercial lenders as we anticipate that higher returns are achievable through investments than the cost of debt financing.


Ooops.

Still, a cheapish punt on Eastern Europe if you're looking for one. But I digress.

Here's the AIM stock exchange filing entry describing the new, non-exec director of Equest Investments Balkans Ltd (and majority shareholder representative) Mr Al Kharusi, head of SGRF:



Mr Al-Kharusi, a resident of Oman, joined the SGRF in 1985 as the Director General and is now the Chief Executive Officer of the SGRF. He holds a Diploma in Business Administration.
Mr Al-Kharusi (aged 55) holds or has held the following directorships, and is or was a member of the following partnerships during the past five years:

Current Directorships / Partnerships:
Eagle Properties (L.P.) No.3
Eagle Properties (L.P.) No.4
Eagle Properties (L.P.) No.6
The European Acquisition Company S.a.r.l.
The European Acquisition Company 2 S.a.r.l.
Bulgarian Acquisition Company VI S.a.r.l.
Wopac No.1 Limited
Palm Properties
Sprint (GP) Limited
Normandy (GP) Limited
SEE Capital Sarl
Eagle Properties 7
Spartak Tours AD
Vietnam Oman Investment Company
Advent International
Migros
National Investment Funds Company
Grand Angle Holding France SAS
Le Trema France Property S.A.R.L.
Bulco Acquisition AD

Past Directorships / Partnerships:
None


A very nice list of all the companies SGRF have obviously been investing in! This is not something you find in the business section of the incisive and hard hitting Times of Oman, or even on Google very easily.

Even though many of them are holding companies, I think you'll find some reward for random googling and cross-referencing of the companies above. Let us know what you find.

(There are also cloak and dagger reports of the SGRF trying to take part in a highly secret multi-billion leveraged hostile buy-out of Dow chemical, if you're interested in such things. Dodged a bullet when that one fell through, eh guys? You'd have been down a few billion there already!). And Bulgaria is apparently being looked at for further investment by Oman Oil Company in a huge fertaliser company investment.

Should young Omani's be busy learning Bulgarian, German and Serbo Croat?

Plus you can take a look at the partners bio too:

The newly re-appointed Exec Director, Mr Krumov, owns 3.17% of the company, and is a well connected Bulgarian businessman, who as it happens is also an equity partner with the Omani SGRF in another real estate business in Bulgaria:

SEE Capital Management SARL, which is owned as to 40% by Mr Krumov and 60% by SGRF, is involved, through its Bulgarian subsidiary, in providing management, consultancy and development services in relation to property projects in Bulgaria.


That must all get complicated, eh? Plus there are a slew of other companies, like Equest Capital Management Limited and Equest Property Management Limited, also involved in the development property market.

Its also curious how both of the 2 representatives on the board from the mysterious Kairos Investment fund, (representing a co-owner of 20.50% of Equest Investments Balkans Ltd and clearly takeover partners of the company along with Oman) are also directors of unusually named 'Foundations', probably for Corporate Charity work:

Mr Brera (aged 39) holds or has held the following directorships, and is or was a member of the following partnerships during the past five years:
Current Directorships / Partnerships:

Kairos investment Management SpA
Kairos investment Management Limited
Oliver Twist Foundation

Past Directorships / Partnerships:
None

Mr Azizjoined Kairos in January 2006 ...Previously Mr Aziz has specialised in Telecoms research and he held a number of senior research positions at securities houses in London and Karachi...
Mr Aziz (aged 43) holds or has held the following directorships, and is or was a member of the following partnerships during the past five years:

Current Directorships / Partnerships:
Little Lord Fauntleroy Foundation

Past Directorships / Partnerships:
None
...


Does anyone else not find that curious? What's going on with that?
Ahh, here... via the Italian site. Nice.

And who owns the 20%??? Remember these guys just represent "funds managed by Kairos"... In fact:

Kairos Asset Management is a boutique investment firm focusing on customized investment solutions for institutional and affluent investors.

The Kairos Vision
Kairos Asset Management, LLC was formed to provide individual and institutional clients with access to customized and unique investment solutions without the inherent conflicts of interest at traditional Wall Street firms and Commercial Banks.

At Kairos Asset Management, we maintain an independent perspective. We have invested in state of the art technology and research to enhance our client offering. Having spent several years managing one of the most successful teams at a global wirehouse firm, we believe there is a better way to serve clients and we seek to offer that solution.


Still, I wonder who the secret investor is?



The extra boring bit...
RNS Number : 8573N
Equest Investments Balkans Ltd
25 February 2009

Equest Investment Balkans Limited
(the "Company")
Appointment of Directors

Further to the announcement on 4 February 2009 that the Company's two largest shareholders, namely the State General Reserve Fund of the Sultanate of Oman ("SGRF") and Kairos Investment Management Limited ("Kairos"), had requested the appointment of representatives of SGRF and Kairos as directors of the Company, the board announces that today:
• Mr Warith Mubarik Al-Kharusi;
• Mr Faisal Amur Mohamed Al-Riyami;
• Mr Guido Maria Brera; and
• Mr Kalim Aziz
have each been appointed a Non-Executive Director of the Company and that:
• Mr Georgi Krumov
has been re-appointed an Executive Director of the Company.
SGRF currently holds 5,894,834 ordinary shares of no par value in the Company ("ordinary shares") (representing 32.27% of the issued share capital of the Company) and funds managed by Kairos own 3,743,866 ordinary shares in the Company (representing 20.50% of the issued share capital of the Company). SGRF and Kairos together control 52.77% of the issued share capital of the Company.

Enquiries:
Equest Investments Balkans Limited
Tel: + 44 20 7240 7600
Petri Karjalainen
Naomi Kora
Financial Dynamics
Tel: + 44 20 7831 3113
Nick Henderson
David Cranmer
Collins Stewart Europe Limited (Nomad)
Tel: +44 20 7523 8350
Hugh Field KBC Peel Hunt Limited (Broker)
Tel: + 44 20 7418 8900
Capel Irwin
Disclosures under AIM Rules

Mr Al Kharusi
Mr Al-Kharusi, a resident of Oman, joined the SGRF in 1985 as the Director General and is now the Chief Executive Officer of the SGRF. He holds a Diploma in Business Administration.
Mr Al-Kharusi (aged 55) holds or has held the following directorships, and is or was a member of the following partnerships during the past five years:
Current Directorships / Partnerships:

Eagle Properties (L.P.) No.3
Eagle Properties (L.P.) No.4
Eagle Properties (L.P.) No.6
The European Acquisition Company S.a.r.l.
The European Acquisition Company 2 S.a.r.l.
Bulgarian Acquisition Company VI S.a.r.l.
Wopac No.1 Limited
Palm Properties
Sprint (GP) Limited
Normandy (GP) Limited
SEE Capital Sarl
Eagle Properties 7
Spartak Tours AD
Vietnam Oman Investment Company
Advent International
Migros
National Investment Funds Company
Grand Angle Holding France SAS
Le Trema France Property S.A.R.L.
Bulco Acquisition AD

Past Directorships / Partnerships:
None

Mr Al-Riyami
Mr Al-Riyami, a resident of Oman, joined the SGRF in June 2007 as the Section Head of Direct Investments of the SGRF.
Mr Al-Riyami was previously the Finance Director of Railtech Solutions Limited ("Railtech Solutions") (see further below), a company located in Portsmouth in the UK specializing in IT software for principally road and rail networks in the transportation sector (2005 to 2007), Financial Controller of Nawras Telecom (2004 to 2005) and an Internal Auditor at Bank Muscat (1999 to 2004).
Mr Al-Riyami holds an MBA (Finance) from the University of Leicester and is a member of the Chartered Financial Analyst Institute and the Chartered Alternative Investment Analyst Association.
Mr Al-Riyami is a director of Borovets Invest EAD, which is a joint venture between a subsidiary of the Company and the SGRF.
As noted above, Mr Al-Riyami was appointed the Finance Director of Railtech Solutions (a company incorporated in England & Wales with registered number 03973036) on 1 November 2005. At the time of his appointment, Railtech Solutions was in financial difficulties and Mr Al-Riyami joined in that knowledge and with the express intent of trying to restructure and turn around Railtech Solutions. He resigned as a director of Railtech Solutions on 6 March 2007. On 29 March 2007 joint administrators were appointed to Railtech Solutions, under the floating charge, under Paragraph 49 of Schedule B1 to the Insolvency Act 1986. The winding up of Railtech Solutions commenced in June 2008 and Railtech Solutions was dissolved in January 2009. The secured creditor was paid in full and the shortfall for unsecured creditors was approximately £1 million.

Mr Al-Riyami (aged 32) holds or has held the following directorships, and is or was a member of the following partnerships during the past five years:

Current Directorships / Partnerships:
SEE Capital Management Sarl
Spartak Tours AD
Borovets Invest EAD

Past Directorships / Partnerships:
Railtech Solutions Limited

Mr Brera
Mr Brera, who is Italian, is a co-founder of Kairos. He graduated from Universita La Sapienza, Rome and qualified as a Dottore Commercialista (the equivalent of a chartered accountant) in 1993. In 1994, he joined Fineco SIM, concentrating on relative value trades, calendar spreads, stock index futures arbitrages and the establishment of structured products for institutional clients. In 1996, he joined Cisalpina Gestioni as manager of the Cisalpina Bilanciato and Cisalpina Indice funds. In 1997, he joined Giubergia Warburg as director, Head of Proprietary Trading, leaving to establish Kairos in early 1999. Mr Brera has been co-manager of Kairos Fund Limited since its inception in June 1999.
Mr Brera (aged 39) holds or has held the following directorships, and is or was a member of the following partnerships during the past five years:
Current Directorships / Partnerships:

Kairos investment Management SpA
Kairos investment Management Limited
Oliver Twist Foundation
IMATION (Italy)

Past Directorships / Partnerships:
None


Mr Aziz
Mr Aziz joined Kairos in January 2006 and is the co-fund manager of the Kairos Eurasian Fund with Guido Brera and is the primary analyst at Kairos for stocks in the Eurasian markets. Before joining Kairos, he was Head of Equity research for the EMEA Region at UniCredit Banca Mobiliare in London (2004 to December 2005). Previously Mr Aziz has specialised in Telecoms research and he held a number of senior research positions at securities houses in London and Karachi. Mr Aziz holds a Masters in Business Administration from the University of Karachi.
Mr Aziz (aged 43) holds or has held the following directorships, and is or was a member of the following partnerships during the past five years:
Current Directorships / Partnerships:
Little Lord Fauntleroy Foundation

Past Directorships / Partnerships:
None

Mr Krumov
Mr Krumov was previously appointed an executive director of the Company on 23 June 2008 and resigned on 7 November 2008.
Mr. Krumov has more than thirteen years of experience in executive positions in multinational companies operating in Bulgaria and the region such as Cable & Wireless (UK), Burmah Castrol (UK) and British Petroleum (UK). Mr. Krumov is an owner of a diversified group of companies operating in Bulgaria, one of which is Electron Progress AD, one of the country's largest suppliers in the defence communication sector.
Mr. Krumov, together with Mr. Kari Haataja and Mr. Petri Karjalainen (who are also directors of the Company) are the owners of Equest Capital Management Limited. Prior to the reorganisation of the management structure of the Company earlier in 2009, the Company had delegated the day-to-day management of its investment portfolio to Equest Capital Management Limited, which acted as the Investment Manager to the Company.
Mr. Krumov previously owned an indirect interest in 20 per cent. of the issued share capital of Avto Union AD (which is a subsidiary of the Company).
Mr Krumov (aged 46) holds or has held the following directorships, and is or was a member of the following partnerships during the past five years:
Current Directorships / Partnerships:

Avanti Capital EAD
Avto Union AD
Axes Europe OOD
Boyana Residence OOD
Burma Oil TP
Companies Management International Centre AD
Equest Capital Management Limited
Equest Property Management Limited
GBK EOOD
Gransport Auto EOOD
IQuest EAD
Mejdunaroden Tzentar Po Firmeno Upravlenie AD
National Board of Tourism Association
Novera AD
Rila-Samokov 2004 AD
SEE Capital Management AD
SEE Capital Management Sarl
Spartak Turs AD
Uniqa Health Insurance AD
UNIQA Insurance Company AD
Nigo 62 SD
VIP International Services OOD

Past Directorships / Partnerships:
Atia Holidays EAD
Banya Holiday AD
Bellevue Property Management EAD
Borovets Investments EAD
Castrol Italiana
Cherno more- Belvue OOD
Equest EAD
Electron Progress AD
EPM Holding EAD
Equest Investment Balkans Limited
Equest Partners Limited
Hastings EOOD
Insurance Company Vitosha AD
Lexington EAD
Star Motors EOOD
Strategicle defencive systems AD
Union Properties EAD

Mr. Krumov has a beneficial interest in 579,517 ordinary shares in the Company (representing 3.17% of the issued share capital) and 188,308 warrants in the Company.
SEE Capital Management SARL, which is owned as to 40% by Mr Krumov and 60% by SGRF, is involved, through its Bulgarian subsidiary, in providing management, consultancy and development services in relation to property projects in Bulgaria.
There are no further disclosures required under paragraph (g) of Schedule Two of the AIM Rules for Companies in respect of Mr Al-Kharusi, Mr Al-Riyami, Mr Brera, Mr Aziz and Mr Krumov.

21 comments:

  1. opps. a confusing story i need somebody to make it sample for us. How come these two Omani with Little experience and not enough education background are doing this to the State general Reserve fund, I am sure they are not the decesion maker, they must have the approval of the high profile and top rulers approval to go head with these risky investments in a nonstable part of world.

    HOwever we would pray to GOD and to His Majest to Save us.

    Any one can make the story easier to understand that would be better. However what ever i wrote that is what i understod.

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  2. Dragon- My attitude about the gov't spending their money has always been "if it doesn't affect my money- don't worry about it." That why it didn't bother me that a few years ago the Minister holding the Defense Portfolio owned the biggest defense facility construction contractor, or the majority of the oil field equipment was carried to the interior on the Oil Minister's company trucks. So what?? Someone had to do it and make money. As to transparency- we all knew about it but so what? But a good piece of detective work on your part.

    ReplyDelete
  3. We know that alot of investment around the world were fucked up because of financial crises, demcrapic countries and non-democrapic countries all went upside down !!!

    Bottom line... how much did we loose ?

    ReplyDelete
  4. Bottom line is we have lost an x amount, but still better than investing our money with the likes of Bernard Madoff.

    I don't think it's fair to ask Oman to disclose what and how much it lost in the crisis, when no other country in the world is able to provide such figures of its own.

    Still I have to say UD is quite impressive in digging out stuff, I guess it's a habit ;)

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  6. This comment has been removed by a blog administrator.

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  7. Salim Macki is not a minister. Any involvement he might have with Dow Chemical would be through his board position in Oman Oil Co and their Polyethylene JV that never took off the ground. Dow also had another poly project in Kuwait that was blocked by that country's parliament.

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  8. Interesting but I'm guessing that Macki was present at the Dow meeting because of the close relationship he has with Ruane et al. Maybe Fortune was wrong when it said two ministers. Still would like to know the names of those Omanis present at the cloak and dagger meeting.

    ReplyDelete
  9. Abdullah:

    "Dragon- My attitude about the gov't spending their money has always been "if it doesn't affect my money- don't worry about it."

    The problem there, is that if you can't see or appreciate the long term risks and potential for financial disaster then you could find yourself walking around a rather different Oman where you all have empty pockets again.

    JD

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  10. JD-

    Yes, I do agree with you in most respects. However, you must admit that revenue is pumped into the Omani economy by resources pumped out of the ground, not by 'value created.' If our gov't leaders piss their money away, there will be more coming in from oil/gas sales.

    Second, none of the top gov't officials are accountable for what they do, at least not to the public. (But- buildings can be torn down.)

    I am saying it would take some really big screw ups to produce empty pockets and I can't do anything about it anyway. So, why worry about it.

    Abd

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  11. Oman Observer today (Thursday) has a large article about losses at the NORWEGIAN state fund. Maybe we'll get some local coverage next week...

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  12. Abdullah,

    Are you saying that the western bankers and "investment geniuses" that brought you the current financial crisis have answered to your esteemed tax paying citizens?!

    I envey you for living the illusion !

    ReplyDelete
  13. Abdullah:

    1. If our gov't leaders piss their money away, there will be more coming in from oil/gas sales. Is that so??? If you piss your money away you will be a financial mess no matter how much oil you sell. Take what happened to the gulf recently, they didn't piss their money away and still they are a living part of the financial crisis. They proved to the world that there is no one immune from this crisis.

    2.none of the top gov't officials are accountable. Can you elaborate on that please, as it seems that lately the government is taking serious actions against corrupt officials.

    "can't do anything about it anyway. So, why worry about it" attitude of a dying breed. I feel sorry for people like you, who think change can never happen because they are not part of it. Keep your head buried in the sand, while they remove your feathers.

    ReplyDelete
  14. Oman about to take over Bulgaria, while the UAE already owns part of the Caribbean !!:
    Location
    Equest Investments Balkans
    HWR Services
    Craigmuir Chambers
    PO Box 71, Road Town, Tortola
    British Virgin Island,
    United Arab Emirates
    P: +971 0

    ReplyDelete
  15. Al-Amry, Mr. T : Good comments

    I think the current world financial crisis has been brought on by GREED- not only greed in the 'West' but elsewhere, and yes, the tax paying citizens are paying the bill. Do you pay taxes? I don't.

    Gov't Accountability is difficult to measure. In Europe and US, there is a relatively free press to help hold public officials accountable, unfortunately in Oman there is not. I will ask you to be specific- which gov't officials have been fired for corruption? Who did the investigation? I know there have been some cabinet 'shuffles' but have they been for corruption? Maybe so.

    I worry about lots of things, but save my serious worrying for things I can change. I cannot change the gov't investment policies. Abd

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  16. Abdullah,

    Don't let the bastards get you down. Its good people that do matter in the end. It just takes a bit more courage to get there.

    ReplyDelete
  17. Abdullah:

    Sorry if we came on too strong, no offense.

    My point is please try and have a positive attitude toward change and hopefully it will happen.

    Wille Dyer:

    STFU

    ReplyDelete
  18. MR T:

    I am positive I am not the only one who does not welcome your asinine contributions to any of the blogs you comment on. I suggest you spend a bit more time reading other peoples' posts and comments before you hit the publish button.

    I would be grateful if you would start your own blog, where you can order people around and showcase your bigotry and lack of intellectual capacity - I would read it and show the same respect you demonstrate consistently here and on other blogs.

    Arjay

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  19. Arjay:

    I took the time reading your comment over and over again, and have this to say.

    Don't panic about losing your job in Oman, it is natural. You have given us your best and it is time to move back to happy India.

    Try to make your last few months here memorable, so you will have some beautiful stories & memories when old & bold to bore your children with.

    Regards to RAM.

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  20. Oh, but Oman has oil reserves! And this is such a happy country, so clean and nice, that the crisis will never ever come to Oman!

    So, if the rulers want to go on stealing and developing projects with no future, it is ok, as we peace loving Omani citizens will also carry on with our own sleazy deals. Everybody steals, so everybody is happy. We are so rich!

    Just wait until the crisis starts making a real impact in Oman.

    No one here realises that the clock of history sometimes goes back.

    And don't forget that among the newly rich, Oman is one of the newest.

    Maybe a little bit less arrogance would make you some good when the crisis starts hitting.

    ReplyDelete
  21. with my all respects to everybody, i think that the govts should change the direction of using the SGRF investments and directed to Oman, because we need to build our country, there is many things that we have to do it for Omanis citizens !!

    ReplyDelete

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