No takers as Irish State bids to sell Russian assets

Alfa Group’s A1, the trading and investment company owned by Russian billionaire Mikhail Fridman, said that it failed for a second time to attract buyers for a logistics centre owned by the Government.

“The first two rounds of the auction failed due to the lack of applications from potential buyers to take part,” A1’s press service said in an email.

A1 is seeking at least 2.58bn rubles (€37m) from the sale of Q-Park located in Kazan, Russia, 725km east of Moscow. The first auction took place in December and the second earlier this month. A1 said it will seek to find new bidders in “late April”.

The Government formed a joint venture in April 2013 with A1 to recoup property assets valued at €470m in Russia and Ukraine accumulated by Seán Quinn.

Philip McDonagh, Ireland’s former ambassador to Russia, has said recovery of the assets is of “paramount importance ”. They include a skyscraper in Moscow, a shopping centre in Kiev, and warehouses.

A1 will receive as much as 30% from the sale of the assets, it said in in 2013.

The conflict in Ukraine, the volatile ruble and low oil prices have combined to put off or delay plans by foreign investors to enter the Russian real estate market, according to Tom Mundy, head of research at Jones Lang LaSalle in Russia.

“Limited and expensive financing has provided additional difficulties for local players,” Mundy said.

A1, formerly known as Alfa-Eco, has helped manage billions of dollars of assets for Alfa Group in energy, metals, telecommunications, and retail. It focuses on investment projects of two types: special situations and growth strategies.

Bloomberg