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Russia state fund to sign deals worth 100 bln roubles at June forum
May 23, 2017 / 2:41 PM / 6 months ago

Russia state fund to sign deals worth 100 bln roubles at June forum

LONDON, May 23 (Reuters) - The state-backed Russian Direct Investment Fund is expecting to sign 100 billion roubles ($1.8 billion) worth of deals at an investment forum in early June in sectors such as transport, logistics and mining, its chief executive said on Tuesday.

RDIF’s chief executive Kirill Dmitriev added that he was “optimistic” about a potential investment in Eurasia Drilling, which the fund has been eyeing through its Russia-China Investment Fund, in conjunction with Abu Dhabi sovereign wealth fund Mubadala, according to market sources.

Eurasia Drilling is Russia’s largest drilling company by metres drilled. The sovereign funds are thought to be interested in taking a minority stake of 13-15 percent.

“We are moving full speed ahead. We believe this is a very interesting investment not only for Middle Eastern partners but also a possible investment for the Russia-China fund,” Dmitriev told London-based journalists on a conference call.

“So we are optimistic about being able to finalise our investment in Eurasia Drilling very soon.”

The fund is also mulling whether to invest in state shipping firm Sovcomflot, part of which will be sold in June.

“We believe Sovcomflot is very high quality and run very well, and we are open to considering an investment in Sovcomflot but we have not reached a final decision as of yet,” he said.

Other deals expected at this year’s St Petersburg International Forum are in the utilities, agriculture, real estate development and healthcare sectors, but Dmitriev declined to give details.

The forum will be held on June 1-3 and is expected to attract sovereign wealth funds from around the globe, including representatives from Oman and New Zealand for the first time, Dmitriev said.

The RDIF was set up in 2011 to buy stakes in companies alongside foreign financial and strategic investors. It can invest up to 20 percent of its capital outside Russia.

It has reserved capital of $10 billion under management and another $30 billion in commitments from foreign partners, which include other sovereign wealth funds from Asia, the Middle East and Europe.

Sovereign funds from Qatar, Saudi Arabia, the UAE, China and Kuwait are part of a consortium with the RDIF aiming to invest in St Petersburg’s Pulkovo airport. Dmitriev said finalisation of this deal was expected shortly.

The RDIF is looking at investments in other Russian airports and toll roads, he added. It is also interested in making an investment in French logistics company GefCo, as part of RDIF’s strategic aim to do more with its European partners.

“We will be on a massive outreach programme to Europe,” he said, adding that he hoped to announce some transactions in Germany this year.

Although Western sanctions against Russia have not prevented co-investments from going ahead, Dmitriev acknowledged that for many European banks and funds, there was a stigma associated with considering Russian opportunities.

“We see this changing... Time will tell. Sanctions are a limiting factor, but it’s not up to us to discuss how to get rid of them. This is a decision for our European partners,” he said. ($1 = 56.3140 roubles) (Reporting by Claire Milhench; Editing by Hugh Lawson)

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