NCSP will not be privatized by end of week - source
MOSCOW. Nov 8 (Interfax) - Novorossiysk Commercial Sea Port (NCSP) will not be privatized by the end of this week, a source familiar with the situation surrounding the upcoming sale told Interfax.
"Nothing will be decided on at least until the weekend," he said.
NCSP was planning to kick off investor education for the sale of the Russian government's 20% stake on October 30, with the deal itself being finalized at the start of November. Sources also told Interfax that Russian officials could not come to a unified decision on whether or not NCSP should be privatized right now.
A source previously told Interfax that the final deadline for conducting the transaction in the accelerated book building format is the end of December.
On October 31, First Deputy Prime Minister Igor Shuvalov said that the state's stake in NCSP could be sold to a strategic investor with a premium to the market price. He said that the Russian government has asked the Federal Property Agency (Rosimushchestvo) and an investment consultant (UBS) to analyze how much cash the state will generate if it holds a public placement of the NCSP stake and if it sells to a strategic investor. In addition, the government wants to know whether there is such a strategic investor and whether the company has been adequately valued.
However, a financial market source told Interfax that it is unlikely that any of the strategic investors, including Summa Group, which is a controlling shareholder in NCSP together with OJSC Transneft , would vie for the 20% stake in the port.
"The entire stake might be interesting to a major foreign fund, but in that case it would be more logical to sell a blocking stake. But then it would be necessary to strike an agreement with the port's existing shareholders," the source said.
NCSP conducted its initial public offering (IPO) in 2007, and its GDR (global depositary receipts) on shares are traded on the London Stock Exchange. In October, the Federal Financial Markets Service (FFMS) raised the limit on how much stock the port can circulate abroad from 20.3% to 25% of capital. Control over Russia's largest port operator belongs to Novoport Holding, a parity joint venture between Transneft and Summa Group (50.1% of shares). OJSC Russian Railways (RZD) owns 5% of the port.