OAO Novorossiysk Commercial Sea Port, which handles oil exports from the Black Sea port, said it had agreed to sell a controlling stake to Transneft and its partner, Summa Capital, in a statement late yesterday. Transneft intends to integrate Novorossisyk with Primorsk Commercial Port LLC, the biggest oil export terminal in Russia, which is on the Baltic Sea close to St. Petersburg.
“This deal will further cement Russian state control over exports of energy resources by giving Transneft a dominant role in handling crude oil deliveries through ports,” said Kirill Kazanli, an analyst at Troika Dialog in Moscow. Through its ownership of Novorossisyk, Primorsk and Kozmino ports, Transneft will be responsible for shipping more than 60 percent of maritime crude and oil product exports in Russia, according to Troika.
Transneft Chief Executive Officer Nikolai Tokarev in a February interview complained about the lack of investment by the current owners of Novorossiysk, which handles almost 60 million tons of crude and oil products a year. Transneft under different management sold the port’s oil terminal in 2006 in a strategy that turned out to be a mistake, spokesman Igor Dyomin said by telephone today.
‘Strategically Positive’
The deal is “strategically positive” for Transneft, as it will allow the company to exercise control over the entire chain of exports on the southern route from Russia, said VTB Capital in a research note today. Control of ports infrastructure is considered important for the pipeline operator, it said.
The final terms of the transaction haven’t been agreed yet and the board of directors and Russian regulators need to approve the acquisition, the Novorossiysk statement said. This might take three to six months, Vedomosti reported, citing an unidentified official from the port operator.
Transneft’s Dyomin declined to comment on the deal. Kadina Ltd., controlled by Alexander Skorogobatko, Alexander Ponomarenko and Arkady Rotenberg, currently owns 50.1 percent of Novorossisyk and will sell this entire stake, according to Vedomosti.
With Novorossiysk’s market capitalization at around $3 billion, according to yesterday’s closing share price in London, the shareholders will get around $1.5 billion, Troika said.
“The transaction terms have more of a political twist than an economic one,” said Kazanli. “Port asset valuations remain subdued and now is not the best time to sell.” Novorossiysk was valued at around $5 billion when it sold about $1 billion of shares in an initial public offering in London in 2007.
Summa Capital is controlled by Ziyavudin Magomedov, a businessman from Russia’s southern province of Dagestan, according to Vedomosti. A co-owner of Primorsk port, Summa will also hold a half-share in the 50.1 percent stake in Novorossiysk, the Interfax news service reported, citing a person familiar with the matter.
