Kremlin seeks small investors for its state shipping firm privatization
Russia’s Sovcomflot operates the world's second largest fleet of oil tankers and has long-term contracts with major energy producers. It ships oil from remote locations not connected to the Russian pipeline system such as Gazprom Neft's Prirazlomnaya platform in the Pechora Sea, or the ExxonMobil-led Sakhalin-1 project. The company also has a contract to ship gas from Russia's newest liquefied natural gas plant, Yamal LNG.
According to the Russian Economy Ministry, the state is selling 25 percent of Sovcomflot and hopes to raise as much as 30 billion rubles ($533 million) from the sale. The ministry said, "there is a high interest from both Russian and foreign institutional investors."
"A strategic investor will ask for the right to be involved in the management, one day or another. This is not what Sovcomflot needs," said a government source close to the deal.
Sources told Reuters that 75 percent of the funds raised from privatization would go to the state budget while the rest for the company’s further development.
Russian authorities decided on privatizing Sovkomflot in 2009, but since then the process has repeatedly been stalled.
Initially, the government wanted to list the firm in New York and Moscow, but according to an unnamed banker, the US listing fell apart because of sanctions.
Sovcomflot itself is not subject to sanctions but "there is an understanding it is better to do the deal here," said the banker.
People familiar with the sale said there are still plans for the company’s initial public offering in Moscow in June.
"When you have 30-, 25-, 20-year-long contracts, it is an easy-to-sell story, especially via IPO," said the government source.