Russia to allocate 100% of Makhachkala seaport to JV with strategic investor that will contribute funds, buy out govt's stake going forward

MOSCOW. March 19 (Interfax) - Russia and a strategic investor will establish the JSC North-South joint venture, with the government allocating 100% of the shares in JSC Makhachkala Commercial Seaport (MCS) and the investor contributing funds and buying out the government's stake going forward.

President Vladimir Putin has signed the corresponding decree. The Russian government and the head of Dagestan proposed establishing the JV, according to the text of the document.

The government will determine the strategic investor.

The asset to be included in the capital of the new joint-stock company is valued at 1.25 billion rubles. The strategic investor must ensure that it contributes funds totaling a 51% stake.

The government must ensure that a shareholder agreement is concluded within four months. Among its conditions will be the purchase by the investor of the state's 49% share in the JV within five years from the date of the conclusion of the agreement.

The Cabinet of Ministers must also ensure that the lease agreements with those federal property sites where the Makhachkala Port is a tenant include conditions for termination if the capacity of the Port's cargo terminals decreases below 9 million tonnes per year after 4.5 years from the date of conclusion of the agreement (unless the decreases occur for reasons which are out of the Port's control).

The Makhachkala Commercial Seaport is Russia's only ice-free deep-water port in the Caspian Sea, accepting ships of up to 150 meters in length with drafts of up to 4.5 meters, its website says. It combines complexes for the transshipment of dry cargo (with a capacity of 3 million tonnes per year), light and dark petroleum products (7.9 million tonnes), berths for general, bulk cargo and containers (1.2 million tonnes), railway and ferry terminals (1.3 million tonnes), and a grain terminal (0.5 million tonnes).