RDIF, RCIF and leading Middle Eastern investors to support the creation of leading Russian pharmaceutical manufacturer

Moscow, April 25, 2019 − A consortium of investors including the Russian Direct Investment Fund (RDIF, Russia’s sovereign wealth fund), the Russia-China Investment Fund (RCIF, established by RDIF and China Investment Corporation), and leading Middle Eastern funds, have announced investments in a project to develop JSC PE Obolenskoe into a leading Russian pharmaceutical holding.

In December 2018, Sistema and VTB Bank acquired shares in the drug manufacturer Obolenskoe from Gazprombank and the investment fund UFG Private Equity. The Consortium obtained the right to join the deal after thorough analysis of the project by investors was completed. The parties plan to expand the pharmaceutical holding by merging Obolenskoe with the biopharmaceutical company Binnopharm, which is controlled by Sistema. The total investment will amount to RUB 15.5 bn.

Kirill Dmitriev, CEO of the Russian Direct Investment Fund (RDIF) and Co-CEO of the Russia-China Investment Fund (RCIF), said:

“This merger will help Obolenskoe increase its output of a wide range of products thanks to Binnopharm’s modern production facilities. In addition, it will support the development of innovative products and enhance the company’s research & development capabilities. According to our estimates, the proposed consolidation of assets will provide a synergy effect of over RUB 4 bn. We expect the company will be able to double its sales in the next four years.”

Bing Hu, Co-CEO and President of the Russia-China Investment Fund (RCIF), said:

“The Russian pharmaceutical market is of interest both for local companies and international players. Not only will the merger create one of the largest pharmaceutical companies in the Russian market, but it will also facilitate the development of an R&D center, which would be a compelling prospect for international biotechnology and pharmaceutical companies, including Chinese players.”

Andrey Dubovskov, President of Sistema, noted:
“We are pleased to welcome a new equity partner in Obolenskoe. RDIF and its co-investors invest into promising Russian projects aimed at addressing high-priority tasks that Russian economy faces. RDIF and its co-investors’ decision to join this project to create a pharmaceuticals holding on the basis of Obolenskoe and Binnopharm is a strong confirmation of the project’s investment case and its importance for the development of the sector.”

Yuri Soloviev, First Deputy President and Chairman of VTB Bank Management Board, noted:
“The pharmaceutical industry is one of the fastest growing sectors globally, and it is now also a priority sector for investments in Russia. Sistema is one of the most successful investors and a long-standing partner of VTB. We strongly believe that by working together and drawing in experienced partners, such as the Russian Direct Investment Fund, we will succeed in creating a major pharmaceutical holding and market leader. VTB Group plans to further expand the merged company’s capabilities, and contribute heavily to the development of the pharmaceutical industry – which is one of the most socially significant sectors of the Russian economy.” 

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Russian Direct Investment Fund (RDIF) is Russia's sovereign wealth fund established in 2011 to make equity co-investments, primarily in Russia, alongside reputable international financial and strategic investors. RDIF acts as a catalyst for direct investment in the Russian economy. RDIF’s management company is based in Moscow. Currently, RDIF has experience of the successful joint implementation of more than 70 projects with foreign partners totaling more than 1.5 trillion rubles and covering 95% of the regions of the Russian Federation. RDIF portfolio companies employ more than 700,000 people and generate revenues which equate to more than 5% of Russia’s GDP. RDIF established joint strategic partnerships with leading international co-investors from more than 15 countries that total more than 40 billion dollars. Further information can be found at www.rdif.ru

Russia-China Investment Fund (RCIF) is a joint fund, established by the Russian Direct Investment Fund and China Investment Corporation (CIC). The activity of RCIF is aimed at development of bilateral economic, trade and investment relations between Russia and China. Further information can be found at www.rcif.com

 

Sistema PJSFC is a publicly-traded diversified Russian holding company serving over 150 million customers in the sectors of telecommunications, children’s goods retail, paper and packaging, healthcare services, agriculture, high technology, banking, real estate, pharmaceuticals and hospitality. The company was founded in 1993. Its revenue in 2017 was RUB 704.6 bn; its total assets equalled RUB 1.1 trn as of 31 December 2017. Sistema’s global depositary receipts are listed under the “SSA” ticker on the London Stock Exchange. Sistema’s ordinary shares are listed under the “AFKS” ticker on the Moscow Exchange. Further information can be found at www.sistema.com 

JSC PE Obolenskoe is a Russian pharmaceutical company engaged in the development, production and promotion of modern and high-quality pharmaceuticals in accordance with GMP and ISO international standards. The company produces more than 150 prescription and over-the-counter pharmaceuticals for gastroenterological, cardiologic, phlebologic and neurologic diseases, as well as for the treatment of acute and chronic pain, insomnia, men’s health and more. The Company’s portfolio includes both innovative and generic pharmaceuticals. Further information can be found at http://obolensk.ru/

JSC Binnopharm is one of Russia's largest full-cycle biopharmaceutical companies with an in-house R&D division. The company produces and develops new medicines in several treatment areas (including hepatitis B vaccine, a line of pulmonology and neurology drugs, infusion solutions, and anti-viral and immunomodulating drugs) at two state-of-the-art pharmaceutical plants in the Moscow region that comply with the international GMP (Good Manufacturing Practice) standards. Further information can be found at http://binnopharm.ru/ 

JSC VTB Bank, its subsidiary banks and financial organizations (VTB Group) is an international financial group, offering a wide range of financial and banking services and products in Russia, the CIS, and select countries of Europe, Asia, and Africa. VTB Bank provides a full range of banking services through a wide network of branches. Its subsidiary organizations offer insurance, leasing, factoring and other financial services. VTB Group has the most extensive international network of any Russian bank, with more than 20 banks and financial companies in more than 20 countries. As of 31 December 2018, the Group was the second largest financial group in Russia by assets (RUB 14.760tn) and by customer accounts (RUB 10.403 tn). The Government of the Russian Federation is VTB Group’s main shareholder and owns 60.9% of the voting shares through the Federal Property Management Agency. Further information can be found at http://vtb.ru/

 

For additional information contact:

Arseniy Palagin Andrew Leach / Maria Shiryaevskaya

Russian Direct Investment Fund Hudson Sandler

Press Secretary Tel: +44 (0) 20 7796 4133

Tel: +7 495 644 34 14, ext. 2395

Mobile: +7 916 110 31 41

E-mail: arseniy.palagin@rdif.ru

 

Jessy Zheng

Russia-China Investment Fund

Beijing, China

Tel.: +86 10 5762 9000

Fax: +86 10 57629111

E-mail: jie.zheng@rcif.com 

 

Yury S. Trofimov

Russia-China Investment Fund

Moscow, Russia

Tel.: +7 (495) 230-05-55 ext. 4243

Mob.: +7 (985) 765-13-12

E-mail: yury.trofimov@rcif.com