“We don’t want to go to wagons, ships, planes”

The CEO of the IG “Insight” spoke about the features of the acquisition of captive leasing companies, business priorities and increased competition with state-owned companies “Kommersant” Avet Mirakyan.

— Recently, the leasing market has been active in mergers and acquisitions against the backdrop of the withdrawal from the Russian Federation of foreign manufacturers of machinery and equipment that used to have captive structures. Should we expect new deals in the near future? Are there any interesting assets left on the market? Should we expect strengthening of consolidation and around which players or assets?

– I think that we should wait for a few more large deals with foreigners who have decided to leave. Processes are underway, but not all transactions can be immediately coordinated and closed. There will also be several small transactions – in financial and operational leasing. Of the Russian companies, everyone knows Baltic Leasing. The idea of ​​selling is on the market, but the process is not very clear, it is unlikely to be completed before the end of the year.

The market is definitely waiting for consolidation. Captive leasing companies have suspended operations and have already sold their portfolios or are in the process of doing so. Then everything depends on the strategy of the new owners. We stand for the development of business with the preservation of teams and further strengthening of their positions in the market. If the bulk of the buyers will have the same approach, it is good for the market as a whole: it will lead to increased competition, growth in volumes and development.

– How much can large transactions be valued?

— I would estimate them at tens of billions of rubles. But this does not mean that the company itself is worth so much. This means that capital and the right to claim the debt of the parent structure are bought.

— The situation is the same with Baltic Leasing?

– I’m talking about foreigners leaving the Russian Federation, since these transactions contain an element of regulatory approval, which largely determines pricing. There is no such factor with Baltic Leasing.

— How much can competition increase in the leasing market in connection with the activation of private companies?

— Taking into account the fact that the main buyers of leasing companies of foreign owners are private individuals, their market share will increase. And this is positive for the industry, because companies that were focused on only one manufacturer are changing the format and becoming universal. Many captive companies had very high professional competencies, developments that, if properly used, would benefit the market as a whole.

— State-owned companies are not interested in these assets?

— The sellers have a clear requirement: the buyers must be companies not included in the sanctions lists. As a rule, sellers avoid everything related to state-owned companies.

— How actively do parent structures participate in transactions? How is it regulated by law?

Negotiations are underway with the parent companies on the terms of the buyout. They organize an auction search for the best conditions, the best contender for the deal. They also make sure that the buyer is acceptable in terms of compliance risks, reputation, so that his financial performance is stable and he can fulfill the terms of the transaction.

– Of foreign assets, what is sold and bought in the first place?

— First of all, we look at the company as a leasing business that can be developed independently. Therefore, the portfolio is, of course, the most important element, on the basis of which the price is formed, the primary commercial conditions. We are also very carefully studying competencies, a team that is able to independently develop technologies, distribution networks – that is, everything that will allow you to restart your business. We have seen companies that, for example, have a portfolio but lack these elements. This business is not worth fighting for.

— Almost six months have passed since you bought Siemens Finance, which has now become Delta Leasing, and restarted the company after a long downtime. Can we already talk about the first results?

— For six months, 1.3 thousand contracts were signed for a total of 16 billion rubles. But it is important to understand that DeltaLeasing, unlike other companies that are currently being sold, was not captive in the full sense, only in terms of funding. In all other respects, this is a full-fledged market company, in which even the concentration on the equipment of one manufacturer was not total, it was federal, with a wide distribution network. We retained the entire team, all competencies, and with a fairly small cost and effort, we restarted the business in a short time.

It is clear that half a year of inactivity creates certain difficulties, but since all the competencies and people have been preserved, getting back to customers through the relationships that have developed over many years of cooperation has not become a super difficult task.

— What happened?

— The difficulty is to teach the company to fund in the market on its own. This is where we, as shareholders, helped. DeltaLeasing received the necessary funding at the first stage, but now it does it on the market itself. We don’t do direct injections. The company itself interacts with banks, attracts loans and uses them. It is clear that, unlike the old model, these funds are more expensive, so they also have to be placed at higher rates.

— DeltaLeasing still focuses on specialized equipment. Are you going to increase your share in other segments?

“Our basic goal was precisely to preserve the existing competencies and develop further on their basis. We definitely don’t want to go to wagons, ships, planes.

– But go to the segment of agricultural machinery …

– Already out.

– And how are you doing?

— We have restarted the John Deere Financial leasing business. While we are talking about the first days after the deal, it is too early to talk about any results. Unlike Delta Leasing, after all, John Deere is a company that specialized in just one manufacturer, and in this sense it will be necessary to transform the business. We have retained the backbone of the team, there is already an understanding of how to position ourselves, how to enter the market, work has already begun. I can definitely say that we want to keep the company’s specialization.

— In the segment of agricultural machinery, the positions of state-owned companies are very strong. How will you divide the market?

— Same as in all segments. State-owned companies are represented everywhere – somewhere more, somewhere less. Competition and its principles do not change. Due to manufacturability, due to speed, due to customer focus and existing developments, the company will successfully take its share in the market.

— DeltaLeasing has already become an independent market company. Is it the same plan for John Deere?

— Yes, the strategy in this sense is no different. At the first stage, we help the company with raising funding, but in a short period of time, the company must develop competencies for itself, enter the market, communicate independently with banks and raise money.

– Does this timing coincide with the moments when you announce a new bond issue and extinguish it?

— No, the issue of bonds is only a tool for funding transactions at the entrance. It appeared not by chance: many sellers are very sensitive to such issues as the source of funds for the purchase, how it is connected with government agencies and sanctioned companies. Many require legal opinions on the structure and sources of funding. Banks are also watching this very closely, because they need to make transfers through correspondent accounts.

Therefore, it is important that the history of the financing of the deal be transparent. And the only convenient instrument is bonds. We make a specially closed subscription in order to be able to clearly show who bought the securities, so that the placement speed is high for a quick closing of the transaction.

— Does the volume of placement coincide with the amount of the deal?

– Not always. When placing, there may be additional tasks, the need to additionally finance something. We can increase the amount or, if we have our own funds, take less.

— And why are you buying bonds rather quickly?

– Largely because we are buying a company that has cash on its balance sheet, which, due to legislative restrictions, the former shareholders could not dispose of. The structure of the transaction in leasing companies is the purchase of capital and rights of claim on debt provided by parent companies. Accordingly, when you buy a claim on a debt, that is, an excess amount of money on your balance sheet, you can very quickly return it and pay off part of the debt.

— You have identified two major segments in which the company will actively develop. Which one looks the most promising in terms of growth and recovery?

— Both in one and in the other there is a great potential for growth, because in general, the penetration of leasing is growing from year to year. Yes, the economy is transforming, there is a shift from Western-made leased items to Chinese and Russian ones. We would not have entered these segments if we did not believe that there is potential and an opportunity to develop further. The story of buying, waiting for portfolio redemption and closing is not ours. We don’t want to do this.

— What other directions in leasing seem promising to you?

— We definitely believe in automobile and operational leasing, we are interested in special equipment, agricultural machinery, equipment and vehicles. But not because other segments are not promising, but simply because the Insight team here has the competencies and understanding of operational processes.

— In the near future to expect transactions with your participation in these segments?

– We participate in almost all the negotiations that we know about and where they are ready to see us. And maybe we can get something else. At the same time, we do not always reach the end of the negotiation process. When you get to know a company better, you begin to understand its advantages and disadvantages. For example, some companies are sold only together with banks, factories or some other assets. Such stories are not very interesting, because we do not have the relevant competencies or desire to do this.

Interviewed by Polina Trifonova