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Russian shipping firm Sovcomflot 25 pct stake sale may involve new shares - sources
September 30, 2016 / 2:46 PM / a year ago

Russian shipping firm Sovcomflot 25 pct stake sale may involve new shares - sources

MOSCOW, Sept 30 (Reuters) - The privatisation of a 25 percent stake in Russian state shipping firm Sovcomflot may be equally split between existing and new shares, two sources close to the deal told Reuters on Friday.

The stake sale in Sovcomflot, Russia’s biggest shipping company whose vessels support offshore oil and gas operations, is part of a wider state asset sale aimed at plugging holes in the state budget.

Revenue from the sale of existing shares goes to the existing shareholder, in the case of Sovcomflot the Russian state. Meanwhile money raised from the sale of new shares goes to the company itself, which it can use for development.

One of the sources close to the sale said the options being considered were to sell 25 percent in existing shares, or alternatively to sell half of that 25 percent stake in existing shares, and half in new shares.

The source said which option would be selected would depend on how much revenue the state wanted to gain from the sale.

A second source, who is familiar with the deal, also said that the option of an equal split between new and existing shares was being considered.

If that is the option chosen, “it would be good for investors to see that shares they invested in are ‘cash in’, for development,” the second source said.

In response to questions from Reuters, the Economy Ministry, which is overseeing the privatisation, said it was “currently waiting the report of the agent with preliminary recommendations on the deal. At the moment it is premature to talk of any options for the deal.”

A spokesman for Sovcomflot, asked by Reuters to comment, said it is up to the state, as shareholder, to decide on the terms of the stake sale. (Reporting by Katya Golubkova and Kira Zavyalova; Editing by Christian Lowe)

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