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TGC-2: how long can it last?

Let's estimate the chances?

Why not?! Remember where it all started: at Gazprom’s Investor Day, the company’s management presented plans to increase contributions to dividend payments, including the company’s subsidiaries – OGK-2 and TGK-2.

Gazprom stock prices immediately soared. Next are the stock quotes of OGK-2 and TGK-2.

Today, TGK-2 shares have become “heavier” by 35%.

He expressed his opinion on the prospects for growth of Gazprom shares earlier, on February 13 (Gazprom: He promised to marry me vs You are my first). The share price at that time was 235.5 rubles. Now – 232.8 rubles.

Forecast

The prognosis is negative.

The immediate target for reduction is 230 rubles. (226 get ready)

Fact

The prognosis is negative.

The immediate target for reduction is 230 rubles. (224 get ready)

Someone doubts that 230 rubles. will? .. You have the right.

but that’s not about that now.

About TGC-2.

As always, we look at charts on different time frames, from highest to lowest.

(today, however, there will not be many of them)

Month

A clear uptrend since 2014.

We begin to clone the level of support, distributing them across significant reference points.

Beautiful? Beautiful. So that's right.

And where is the next one?

Everything is clear.

Next.

What is unclear, unclear, we will make it clearer by distributing an additional level there.

Shall we continue?

And it is necessary?

We'll see now.

Let's return the candles to their place so that today's candle is visible.

Oops! Coincidence?

We'll see now. To do this, let’s “compress” the chart a little to cover a longer period.

The price, as it turned out (or is this not a surprise for you? Did you know?!), has reached a very important level. On the approach to it, either from above, as in 2009..10, or from below, as in 2011, the price movement slows down.

And even turns back.

However, not only growth - there must also be a decline, which can also be shown by trend levels.

The share price continues to rise, so let’s take an unconventional path, not according to the books.

Let's start with the support level.

So that everything is beautiful.

That's it - great!

I would like it to continue to be as beautiful and clear. (and you, my friend, are an esthete!)

The first one went.

Also good.

Great!

We just started to piece together something, right?

Enough, perhaps. Let's stop.

And let's see what happened.

The price squeezed through a sticky resistance zone. Will we see the share price above RUB 0.0080?

Not sure. All this in one day. What is called “in the moment”

Now - stop! Let's move on to another time frame.

a week . There's no new information there.

Day

No “wow!” No need - you'll scare me away. (they already scared me when I took up these graphs)

There are analogues. And also among the “energy workers”.

Once upon a time, DagSb paid a lot of attention to shares.

I present to your attention a fragment of a recording dated May 24, 2011.

DagSb

- exactly the kind of action that not so long ago showed how “energy workers” can fly.

How do you like the rise in prices last November?! More than 300% is not a joke... This is something to make your head spin. .. Since then they have been looking at this stock.. Waiting.. Buying. Little by little. What if, then, someday, the price will rise again, now by 400%?! .. If only I knew when he grows up, they would take more.

More than 300 % !!!

Ha! By 300.. In 2016 – by 550%

If only TGK-2 could do this, right, investors? And OGK-2 too, right?

Just so that later it won’t be like on the DagSb chart, right?

Will you have time to jump out?

Those whose DagSb shares are more expensive than 2 rubles. I bought it - did you manage to get it all out? .. I doubt. After all, only now, years later, people began to admit that they still have Gazprom auctions in their briefcases, bought for 360 rubles. back in May 2008 (or December 2007?)

It's time to move on to conclusions.

Purely subjective, very personal opinion.

Today we saw a local maximum for many years to come. The price is higher than 0.008 rub. – we won’t see.

The nearest reduction target.. (wait a minute!)

The immediate target for reduction is RUB 0.005. (did anyone notice that the RSI is 90%?)

Am I wrong? .. I have the right.

And you - that one. Think with your head. head!

TGK-2 has created a precedent in the ruble bond market

It was possible to persuade not only commercial creditors represented by banks and other qualified investors (names not disclosed), but also a large number of individuals - holders of TGK-2 bonds - to change the conditions again. According to RBC information received from the organizer of the restructuring, more than 25% of the outstanding debt was held by approximately 500 individuals. “This is a record dispersion of the loan, an order of magnitude greater than in the restructurings we carried out earlier, and also twice as much as in a regular bond issue,” said Oleg Gordienko. As a result, 77% of issue holders voted for the restructuring, which is 2% higher than the required minimum.

Employee at Yaroslavl CHPP-2 (Photo: tgc-2.ru)

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Income problems

The number of individuals holding TGK-2 bonds increased significantly after the first restructuring. Investors willingly bought these securities when their yield exceeded 20%, being confident that the company would definitely receive support from the state in one form or another, analysts say. They were not embarrassed by the regular cash gaps of TGK-2, nor the legal claims of VTB (10.9 billion rubles) and Gazprombank (almost 1 billion rubles), to which the generating company did not pay loans, nor its large debt to the Gazprom group "

“Since the company was able to cope with payments on bonds, this, on the contrary, fueled the interest of individuals,” says Aton Investment Company analyst Yakov Yakovlev. “TGK-2 is one of the few problematic stories on the market that attracts the attention of investors with a high risk appetite.”

According to calculations by Transfingroup trader Ivan Belov, when purchasing paper, for example, in October 2015, when its cost was 50% of the face value (437 rubles), a year later, in October 2016, investors could double their investment. This attracted many, Belov adds.

Who owns TGK-2

In 1987, former senator from Chuvashia Leonid Lebedev founded the Sintez cooperative; financier Mark Garber, musician Alexander Kutikov and a number of other people became his partners. The recording company Sintez records was created on the basis of the cooperative. In 2008, when the electricity market was reformed, Sintez acquired 51% in TGK-2, paying more than 20 billion rubles.

In 2021, Lebedev became a defendant in a criminal case; he is suspected of fraud and theft of $220 million from the energy company.

Currently, TGC-2 unites generating enterprises of the Arkhangelsk, Vologda, Kostroma, Novgorod and Yaroslavl regions. It includes 12 thermal power plants with an installed capacity of 2560.6 MW, as well as eight boiler houses and five heating network enterprises.

According to the materials of TGC-2, disclosed in March 2021, 53% of the authorized capital of TGC-2 can be disposed of by Sovlink LLC. 50% of Sovlinka is owned by individuals and pledged to Gazprombank since 2016. In the fall of 2021, this investment company was attracted by the shareholders of TGK-2 to management; shares of two offshore companies controlled by Sintez were transferred to it for management: Janan Holdings Limited and Raltaka Enterprises Ltd; in March - two more: Litim Trading Limited and Kores Invest LLC.

The company's second largest shareholder is Prosperity Capital Management, which has owned a blocking stake in the company since its founding in 2005.

The consolidated revenue of TGK-2, according to IFRS reporting for the first quarter of 2021, from the sale of heat energy is 6.4 billion rubles, from the sale of electricity is 5.4 billion rubles.

Why did we agree?

RBC sources who participated in the negotiations on the second restructuring say that the change of the main shareholder, that is, the arrival of Sovlink in place of Sintez, helped convince creditors of its necessity. “Changes in the composition of the final beneficiaries were the main condition for restructuring the loan,” says a source familiar with the discussions. According to expert estimates from Prosperity Capital Management, during the period when TGK-2 was under the control of Sintez, about 10 billion rubles were withdrawn from the company. “A change in managing managers and a change in the cash flow management model can stabilize the condition of this asset and make it attractive to potential investors,” according to Prosperity Capital Management.

Sovlink, Sintez and TGK-2 did not respond to RBC’s request regarding the current ultimate beneficiaries of the company. Director of Prosperity Capital Roman Filkin told RBC that the fund does not know about the current ultimate beneficiaries of TGK-2.

The second factor, according to RBC sources, was the agreement of other creditors, in particular VTB and Gazprombank, the Gazprom group, to restructure other debts of the company. Thus, the credit debt of TGK-2 is almost 11 billion rubles. restructured VTB, despite the existing court decision on its recovery.

As follows from the presentation for investors on repeated restructuring (available to RBC), the state bank conducted negotiations on re-registration of the debt due to the practical impossibility of repaying the debt, even taking into account the court decision. At the end of 2016, TGK-2, according to the presentation, received a loss of 2.3 billion rubles, and the volume of cash and cash equivalents on the company’s balance sheet, as of March, amounted to only 82 million rubles. Judging by the presentation, the company can generate operating cash flow comparable to VTB’s debt only in the next four years (the planned figure is RUB 13.8 billion). As a result, in early May the parties agreed to restructure the loan. At the same time, TGK-2 paid the bank part of the debt in the amount of 2.85 billion rubles, and the loan rate was reduced from 21.5 to 11%. The accrual of penalties for overdue debt was also suspended.

VTB RBC confirmed the signing of an agreement to restructure the debt of TGK-2, refusing to disclose details. TGK-2 clarified that they repaid 30% of the principal debt on the loan, for the remaining amount of 6.6 billion rubles. The bank provided an installment plan. “The interest rate was reduced to the market level,” added the TGC-2 representative.

Gazprombank, according to the presentation, also sued TGK-2 due to non-payments on the loan. According to RBC sources, TGK-2 is preparing to conclude a settlement agreement with Gazprombank, but negotiations have not yet been completed. Gazprombank did not respond to RBC's request.

According to RBC, difficulties with the practical execution of court decisions on debt collection are not the only and not the main thing that contributed to the compliance of creditor banks. As RBC sources indicate, state banks could not worsen the position of an energy company performing a socially significant function - energy supply to the population, as would have happened if they had filed for bankruptcy of TGK-2. At the same time, the company's bond and loan creditors had a mutual interest in restructuring both types of debt. “If we had not reached an agreement with the banks, we would not have restructured the bond debt; in turn, paying for it would reduce the chances of creditor banks - it would be a vicious circle,” says one of RBC’s sources.

Yaroslavl CHPP-3 (Photo: tgc-2.ru)

New trend?

Despite the precedent created by TGK-2, experts interviewed by RBC believe that repeated restructurings on the Russian market will be rare. And this despite the fact that, as RBC wrote, the ACRA rating agency this year expects banks to have a surge in problems associated with previously restructured loans.

“Restructuring is an unexpected thing, each of them is individual. In my opinion, we have already gone through the main, largest restructurings during this crisis. The situation with coal and metals has improved. If there are similar cases before the end of the year, they will be isolated,” says Gordienko. A similar opinion is shared at the stock exchange. According to Anna Kuznetsova, the level of defaults on ruble bonds was high in 2008, but now it is low.

“Creditors and investors, when determining the fate of a company that finds itself in a difficult situation and choosing methods of solution, are always guided by the logic: a bad peace is better than a good quarrel,” says Yakov Yakovlev. “If a company has temporary difficulties and there is a prospect of an improvement in the situation, investors may agree to restructuring.”