26 Oct 2022 09:41

Dagestan proposes to sell Makhachkala Commercial Seaport to Kerimov - source

KRASNODAR. Oct 26 (Interfax) - Dagestan has proposed to Russia's federal authorities to privatize JSC Makhachkala Commercial Seaport (MMTP), which is owned by the Federal Property Agency, by selling it to a new strategic investor, billionaire Suleiman Kerimov, a source familiar with the situation told Interfax.

Dagestan's leader Sergei Melikov recently made the proposal to President Vladimir Putin, the source said.

"The Makhachkala seaport is a key link in the North-South international transport corridor and its development in the current circumstances takes on strategic importance. But in order to increase MMTP's capacity it is necessary to modernize it. Given the need to modernize the port quickly, the head of the republican government proposed to privatize MMTP by bringing in the necessary investments from an investor," the source said.

The plan is to privatize 100% of shares in MMTP through a direct sale to Kerimov, but gradually.

Dagestan proposes to form a joint company that is up to 49% owned by the state and at least 51% by the investor, with the state gradually divesting its remaining shares as investment obligations are met over a period of ten years, the source said.

MMTP is the only ice-free and deep water Russian port on the Caspian Sea. It can accommodate vessels up to 150 meters long with a draught of up to 4.5 meters. The main cargo handled at the port is hydrocarbons.

Melikov said in September that the issue of including the port in the privatization plan and handing it over to private investors who can invest heavily in its development was being worked out. This would make it possible to use the port for the development of the North-South transport and logistics corridor, he said.

The development of the port was discussed last week in talks between representatives of Dagestan and Iran. Iran could dredge Dagestan's waters, as it has the necessary investment, equipment and qualified professionals, the head of an Iranian business council, Khaled Yahya said.

MMTP was included in the three-year privatization program for 2020-2022 in December 2019, and the program was subsequently extended to 2024. The plan calls for the state to completely divest the port.

The Federal Property Agency released an appraisal report at the end of 2021 that put the market value of 100% of MMTP at about 3 billion rubles. The port closed 2021 with a net profit of 100 million rubles to Russian Accounting Standards on revenue of 744 million rubles.