Russia’s largest stevedore plans to buy the operator of the nation’s largest oil export terminal, then sell a majority of its own shares to the state-owned monopoly oil pipeline operator, from which it is making the acquisition.
Novorossiysk Commercial Sea Port, Russia's biggest port operator, said Thursday it plans to acquire a 100 percent stake in Primorsk Commercial Port, operator of the nation's largest oil export terminal.
Following the deal, estimated to be worth $1.8 billion, Novorossiysk, which is listed on the London stock exchange, will then sell a majority of its own shares to Transneft, Russia's state-owned monopoly oil pipeline operator, and its partner, Summa Capital.
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Combining the capacities of Novorossiysk on the Black Sea and Primorsk in the Baltic Sea near St. Petersburg will create the largest stevedoring company in Russia, Novorossiysk said.
Novorossiysk said the final terms of the planned acquisition of Primorsk have yet to be agreed and it must be approved by its directors and Russian competition regulators.
The acquisition also is conditional on the sale of a controlling stake in Novorossiysk to Transneft and Summa.
Novorossiysk has a current market valuation of around $3 billion compared with a $5 billion valuation when it sold around 15 percent of its shares in an initial public offering in London in 2007.
Kadina, a Cyprus-based investment company controlled by Russian businessmen, controls a majority 50.1 percent of Novorossiysk, which will be sold to Transneft and Summa after the Primorsk deal goes through.
Novorossiysk booked a net profit of $252.2 million in 2009 on revenue of $675.1 million from a consolidated cargo volume of 86.5 million tons, making it Europe's fourth largest port operator.
Crude oil and dry bulk account for most of Novorossiysk's traffic but it has a significant general cargo business totaling over 7.5 million tons in the first eight months of the year.
Container traffic rose to 284,300 20-foot equivalent units from January through August from 155,800 TEUs in the same period in 2009.
Primorsk exported around 75 million tons of crude oil and petroleum products in 2009 that were transported from the Russian hinterland via Transneft's pipelines.
Transneft will account for around 60 percent of Russia's maritime crude and oil products shipments after it takes control of Novorossiysk and Primorsk.
The Novorossiysk announcement comes less than two months after Fesco, owner of Russia's largest ocean carrier, sold a 50 percent stake in National Container Company, for a reported $900 million to an affiliate of oil trader First Quantum, which owns the other half of the nation's biggest container terminal operator.
In December Russia's Novolipetsk Steel sold its 69.4 percent stake in the Black Sea port of Tuapse to the Netherlands-based Universal Cargo Logistics Holding for around $254 million.
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