28 Jul 2010 18:20

Industrial Investors likely to retain control over Far East Shipping after supplemental issue

MOSCOW. July 28 (Interfax) - The main shareholder in Far East Shipping (DVMP) , LLC Industrial Investors, is likely to retain control over the company in the wake of its supplemental share issue, a DVMP spokesman told Interfax.

DVMP opened a bid book Wednesday for shareholders to acquire shares on a preemptive buying rights basis. Within twenty days' time, shareholders will be able to bid for shares, the number of which should be proportional to what they already hold, the company said in a statement.

The share price will be set by the board of directors after the list is closed, and it could be lower than the supplemental placement price, but not by more than 10%.

"We can't foresee who will submit bids, but I will risk suggesting that Industrial Investors will be on the list," the source said.

According to a presentation for investors put on in April, the shipping company's shares are held between Industrial Investors (55.81%), East Capital (6.61%), Temasek (3.14%), and the European Bank for Reconstruction and Development (EBRD) (3.76%); 13% of shares are treasury shares and the remaining 17.86% is in free circulation.

Metropol analyst Andrei Rozhkov said the DVMP shares will enjoy great demand and garner hefty proceeds. "The recent announcement of the sale of the stake in National Container Company [for $900 million] had a positive impact on share value. They are now trading at thirteen rubles apiece, and the minimum price this year was nine rubles," Rozhkov said.

However, the source at DVMP said the company has not yet decided on the timing for the supplemental issue, so predicting a price now is premature.

Analysts with Rye, Man & Gors have made their estimates and recommendations about DVMP available for consideration, and the company notes that the company might pay dividends on the outcome of the deal, though DVMP has said it would consider the matter after it had completed other financial tasks.

The Federal Financial Markets Service (FFMS) has registered the issue of 690,592,500 additional ordinary shares in open subscription. Par value is one ruble, so DVMP's charter capital could increase 23.4%. It is now 2,951,250,000 ordinary shares with one-ruble par value.

President of the group Fesco, of which DVMP is part, Sergei Generalov said recently that the proceeds from the supplemental share issue could go to optimizing the company's loan portfolio and to investment projects, which projects include consolidating OJSC Vladivostok Commercial Sea Port, investment in OJSC Vladivostok Container Terminal, or increasing company presence on the railway freight market.

DVMP is Fesco's main asset. It ferries cargo between ports in Russia's Far East, as well as in South Korea, Japan, China, Taiwan, Viet Nam, Australia, New Zealand, and the United States.