Ministry proposes to sell state stake in Novorossiysk Port on exchange - paper
MOSCOW. May 18 (Interfax) - The Economic Development Ministry, which opposes the consolidation of Novorossiysk Commercial Sea Port (NCSP) in the hands of controlling shareholders Summa Group and Transneft, is proposing to sell the 20% state stake in Russia's largest port through a public offering on the stock market.
Acting Economic Development Minister Elvira Nabiullina sent this proposal to Prime Minister Dmitry Medvedev on May 15, Vedomosti reported on Friday.
A secondary public offering will not only boost the volume of trading on Russian stock exchanges, but also make it possible to control the process of book building, the list of purchasers and amount of shares bought, the paper said, citing Nabiullina's letter. The minister requested an instruction to mandate an investment bank or consortium of banks to coordinate the public offering of the state shares.
The government issued a decree on March 24, 2011 to include the 20% stake in NCSP in the projected federal assets privatization plan for 2011-2013. The port handles crude oil and oil products, and its terminals are used by state oil major Rosneft, among others.
NCSP's largest shareholders are currently state oil pipeline monopoly Transneft and Summa, which together own 50.1% of shares in the port through a joint venture. The government holds a 20% stake and 5% of shares are held by companies controlled by Russian Railways (RZD) .
Transneft president Nikolai Tokarev and Rosneft head Eduard Khudainatov sent letter to then Prime Minister Vladimir Putin in April proposing that the state stake in NCSP be sold directly to Rosneft.
The state companies believe that the Summa Group and the management of the Port of Rotterdam, who are partners, want to gain complete control of the Novorossiysk port. The joint management of shares in the port by state companies - Rosneft and Transneft - will make it possible to maximize synergies resulting from combining the stakes and will promote the full-scale development of the port's business, the letter stated. It also said that RZD's 5% stake in the port should also be sold to Rosneft.
Nabiullina told reporters in mid-April that NCSP could be owned by a single private owner, but only if there is a system in place to regulate access to the port's facilities.
First Deputy Prime Minister Igor Shuvalov, who is in charge of privatization, said at the time: "We should not do anything to make the situation with this service [transhipments at Novorossiysk] worse. We have doubts because major groups will fight for influence at this port."
"I believe that with NCSP we don't have a situation where we need to immediately make a decision," Shuvalov said. However, he affirmed plans to sell the stake in 2012.