The extraordinary general meeting (EGM) of shareholders of Russian cement producer Eurocement failed to elect a new board of directors Monday, Eurocement said. However, an official with A1, an investment subsidiary of Russia’s Alfa Group and strategic partner of Eurocement, told Prime-Tass that the EGM did elect a new board. Eurocement said that the EGM failed to terminate the powers of the current board and thus could not elect a new board.
According to A1, two representatives of investment fund Russia Partners took seats on the new board, while an A1 representative took one seat. Russia Partners’ representatives are managing director Vladimir Andriyenko and lawyer Anna Aleinik and A1’s representative is managing director Yuri Shirmankin. Eurocement’s representatives retained four seats on the board, the A1 official said. They are Mikhail Skorokhod, Vladimir Stupak, Misak Kacheyants, and Alexander Kolesnichenko. Thus, Shirmankin replaced Russia Partners’ representative Sergei Mikulenko on the new board, A1 claims. All the other members remained unchanged.
Russia Partners, which holds 40 per cent in Eurocement, demanded in late November 2005 that the company’s board of directors convene an EGM as it sought to include A1 managers on the board of directors of Eurocement.
Russia Partners wanted A1 to take part in decision making regarding Eurocement’s strategic and daily development, A1 said earlier. This would include such issues as the sharp decline in the company’s profits in 2004 and 2005 compared with 2003 and the conflict with Russia’s Federal Antimonopoly Service, which has accused Eurocement of violating the antimonopoly law, A1 said.
Russia Partners’ Andriyenko said earlier that Alfa Group had agreed to invest in Eurocement and to take part in the managing of the company.
A1 and Russia Partners concluded an agreement on strategic partnership in the construction and cement industries in Russia and the Commonwealth of Independent States (CIS) in early November 2005. Under the agreement, A1 will be a strategic and financial partner of Russia Partners in Eurocement and a consultant in the management of this asset.
Eurocement is one of Russia’s largest cement producers. Besides Russia Partners, its other major shareholder is Eurocement Group with a 55.5 per cent stake. Eurocement controls nine cement plants across Russia and holds stakes in several plants in Belarus and Ukraine. Russia Partners, headquartered in New York, was created in 1994 by the Russian government and the US government through its Overseas Private Investment Corporation (OPIC), which insures the investment risks of US companies in more than 140 countries. A1 is a key investment unit of Alfa Group and is in charge of long-term investment projects.