Millhouse Capital

Millhouse Capital is a British-registered private investment and asset-management company created in 2001 to manage assets held by Russian businessman Roman Abramovich and his partners. Rather than operating as a consumer-facing brand, it functioned as an investment vehicle and holding structure with interests across major Russian industrial and financial sectors. Its portfolio was associated with oil, aluminium, aviation, automotive manufacturing, agriculture, electricity, pulp and paper, insurance, banking, and real estate. The company was chaired by Russian-American businessman Eugene Shvidler. During its most visible period, Millhouse held substantial stakes in several strategically important Russian enterprises. These included Sibneft, one of Russia’s major oil companies; Russian Aluminium, later associated with UC RUSAL; Aeroflot; and RusPromAvto. Millhouse also controlled the Prodo agricultural group, which it acquired in 2003, giving the investment organization exposure to food production and agribusiness. Millhouse’s portfolio changed significantly between 2003 and 2005. In 2003, its shareholders sold a 26 percent stake in Aeroflot. Millhouse also disposed of a 50 percent interest in Russian Aluminium through transactions spanning 2003 and 2004. The prices of those transactions were not publicly disclosed in the cited reference material. The largest reported transaction occurred in October 2005, when Millhouse sold a 72 percent stake in Sibneft to Gazprom for more than US$13 billion. The deal substantially reduced the company’s exposure to oil and prompted a reorganization of the way Abramovich’s remaining assets were managed. The organization also held Russian property assets reported as being worth more than €900 million. Identified properties included Four Winds Plaza, a mixed office and residential development in Moscow, and Hotel Kristall in the Black Sea resort of Gelendzhik. These assets illustrated Millhouse’s role as a diversified holding and investment platform rather than a company focused on one operating industry. Millhouse initially operated from Abbey House in Weybridge, near the St George’s Hill estate in Surrey. After Abramovich acquired Chelsea Football Club in 2003, the company moved its London operations to Stamford Bridge and maintained a larger representative office in Moscow. Following the Sibneft sale, the Moscow office was closed and a new Moscow-based company, Millhouse LLC, was formed in April 2006 to manage assets belonging to Abramovich and his partners. The London office of Millhouse Capital was subsequently closed in August 2008, with its functions transferred to MHC (Services) Ltd. Because the original company’s offices and functions were reorganized into successor entities, the present operating status of Millhouse Capital itself is not clear from the available reference material. Its historical significance lies in its role as the corporate investment platform behind a large and changing portfolio of Russian industrial, agricultural, financial, and property interests.

Millhouse Capital was established in 2001 as a British-registered company intended to manage assets owned by Roman Abramovich and his partners. Its role was principally that of a private investment platform and holding structure. The company did not market consumer products; instead, it assembled and managed positions in large Russian businesses and property assets. Under the chairmanship of Eugene Shvidler, Millhouse became associated with a broad portfolio covering oil, aluminium, aviation, automotive manufacturing, agriculture, electricity, pulp and paper, insurance, banking, and real estate. Among its most prominent holdings were Sibneft, Russian Aluminium, Aeroflot, and RusPromAvto. The company also took control of the Prodo agricultural group in 2003, extending its activities into agricultural production and food-related businesses. The early and middle 2000s were characterized by substantial portfolio disposals. Millhouse shareholders sold a 26 percent interest in Aeroflot in 2003. They also sold a 50 percent stake in Russian Aluminium in transactions carried out over 2003 and 2004. The reference material does not provide prices for those sales. In October 2005, Millhouse completed its most significant reported divestment when it sold a 72 percent interest in Sibneft to Gazprom for more than US$13 billion. Millhouse also held Russian real estate assets reported at a value exceeding €900 million. These included Four Winds Plaza, an office and residential complex in Moscow, and Hotel Kristall at Gelendzhik on Russia’s Black Sea coast. The property portfolio complemented the company’s industrial investments and demonstrated its diversified approach to asset ownership. The company’s offices changed as its corporate and investment circumstances developed. It was initially based at Abbey House in Weybridge, Surrey. Following Abramovich’s acquisition of Chelsea Football Club in 2003, Millhouse moved its London operation to Stamford Bridge. It also maintained a substantial representative office in Moscow. The sale of Sibneft led to a reorganization. Millhouse’s Moscow office was closed, and Millhouse LLC was established in Moscow in April 2006 to manage assets belonging to Abramovich and his partners. The London office of the original Millhouse Capital entity closed in August 2008, after which its functions were transferred to MHC (Services) Ltd. The available material does not clearly establish whether Millhouse Capital continued as an active operating entity after these changes. Accordingly, its current status is best treated as uncertain rather than definitively active or defunct. Historically, Millhouse Capital is notable as a private investment vehicle connected with the consolidation, ownership, and later disposal of important Russian corporate assets during the 2000s. Its identity was defined less by a public-facing brand than by its role in portfolio management, corporate ownership, and restructuring.

• 2008

  London office closes

  [1]Millhouse Capitalen.wikipedia.org

  Millhouse Capital’s London office closes and its functions are transferred to MHC (Services) Ltd.

• 2006

  Millhouse LLC is formed

  [1]Millhouse Capitalen.wikipedia.org

  A Moscow-based company is created to manage Abramovich’s and his partners’ assets after the Sibneft sale.

• 2005

  Sibneft stake is sold to Gazprom

  [1]Millhouse Capitalen.wikipedia.org

  Gazprom acquires Millhouse’s 72 percent stake in Sibneft for more than US$13 billion.

• 2004

  Russian Aluminium divestment is completed

  [1]Millhouse Capitalen.wikipedia.org

  Transactions spanning 2003 and 2004 result in the sale of Millhouse’s 50 percent stake in Russian Aluminium.

• 2003

  Prodo agricultural group comes under Millhouse control

  [1]Millhouse Capitalen.wikipedia.org

  Millhouse takes over the Prodo agricultural group, adding agribusiness to its investment portfolio.

• 2003

  Aeroflot stake is sold

  [1]Millhouse Capitalen.wikipedia.org

  Shareholders sell Millhouse’s 26 percent interest in Aeroflot.

• 2001

  Millhouse Capital is established

  [1]Millhouse Capitalen.wikipedia.org

  A British-registered company is created to manage assets owned by Roman Abramovich and his partners.

A private, diversified investment and holding company focused historically on managing major Russian industrial, natural-resource, agricultural, financial, and real-estate assets.

• Oil and gas investment

  Sibneft investment

  Millhouse held a controlling 72 percent stake in Sibneft, a major Russian oil company, before selling that interest to Gazprom in October 2005 for more than US$13 billion. The disposal was the most financially significant reported transaction in Millhouse’s history and materially changed the composition of its portfolio.

• Metals and mining investment

  Russian Aluminium investment

  Millhouse shareholders held and later sold a 50 percent stake in Russian Aluminium through transactions spanning 2003 and 2004. Russian Aluminium subsequently became associated with UC RUSAL, one of the world’s largest aluminium producers. The cited material does not disclose the consideration paid for the divestment.

• Aviation investment

  Aeroflot investment

  Millhouse held a 26 percent interest in Aeroflot before its shareholders sold the stake in 2003. The investment represented the company’s exposure to Russian commercial aviation, but the cited reference does not provide details of the sale price or transaction structure.

• Agriculture and food production · 2003

  Prodo agricultural group

  Prodo was an agricultural group brought under Millhouse control in 2003. Its inclusion broadened the investment platform beyond heavy industry and natural resources into agricultural production and food-related operations.

• Real estate investment

  Russian real estate portfolio

  Millhouse held Russian property assets reported at more than €900 million in value. Identified holdings included Four Winds Plaza, an office and residential building in Moscow, and Hotel Kristall in the Black Sea resort of Gelendzhik.

• 2008

  Transfer of London operationsStrategy

  Background

  Millhouse had operated from the United Kingdom while maintaining investment-management functions connected with assets in Russia.

  Action taken

  The London office was closed and its functions were transferred to MHC (Services) Ltd.

  Aftermath

  The transfer further separated the original Millhouse Capital name from the ongoing management of the associated asset base.

  Source

• 2006

  Post-Sibneft management reorganizationStrategy

  Background

  The sale of Sibneft reduced the scale and changed the composition of Millhouse’s managed portfolio.

  Action taken

  Millhouse closed its Moscow office and established Millhouse LLC in Moscow to manage Abramovich’s and his partners’ remaining assets.

  Aftermath

  Asset-management functions moved into a successor structure, while the original Millhouse Capital entity became less visibly operational.

  Source

• 2005

  Sale of Sibneft to GazpromM&A

  Background

  Sibneft was Millhouse’s most prominent reported oil holding and a central asset in the portfolio managed for Abramovich and his partners.

  Action taken

  Millhouse sold a 72 percent stake in Sibneft to Gazprom in October 2005.

  Aftermath

  The sale for more than US$13 billion became the company’s defining divestment and was followed by a restructuring of its asset-management operations.

  Reported transaction value. more than US$13 billion (October 2005)

  Source

• 2004

  Divestment of Russian Aluminium stakeM&A

  Background

  Millhouse shareholders owned a substantial position in Russian Aluminium during the company’s period of industrial portfolio expansion.

  Action taken

  A 50 percent stake was sold through two transactions spanning 2003 and 2004.

  Aftermath

  Millhouse reduced its exposure to aluminium production and later had no reported stake in the business.

  Source

• 2003

  Sale of Aeroflot stakeM&A

  Background

  Millhouse’s shareholders held a 26 percent interest in Aeroflot as part of the company’s diversified Russian portfolio.

  Action taken

  They sold the entire reported 26 percent holding.

  Aftermath

  Millhouse exited the identified Aeroflot investment; the reference material does not disclose the sale price.

  Source

1. 1Millhouse Capitalen.wikipedia.org