Companies Fight It Out for Novorossiysk Commercial Sea Port

Russian and global transport companies are in a  fight for control of Novorossiysk Commercial Sea Port, Russia’s largest stevedore company, as the Journal of Commerce reports.

NCSP’s assets include the ports of Novorossiysk, Primorsk, and Baltiysk. The deal would involve a still undetermined majority stake of the company valued at no less than $1.5 billion, but Russian policy could dampen international interest or prevent international ownership.

Among the bidders are the Summa Group, the Delo Group of Companies, and DP World. The port of Novorossiysk is the most valuable of the three ports as it is the largest Russian Black Sea port and handles a wide array of cargo including containers, breakbulk, bulk, and liquid bulk.

The sale of NCSP will include the 20 percent share of the Russian government, 25 percent held by Transneft through a joint venture with the Summa Group, and 5.3 percent owned by the Russian rail monopoly RZD, according to Viktor Olersky, Russia’s deputy minister of transport. The deal could also include another 10.5 percent stake in NCSP owned solely by Transneft, the world’s largest oil pipeline company. All told, the deal could involve taking ownership of 50.35 percent to 60.85 percent of NCSP.

Any prospective buyers, however, would have to take recent policy moves by the Russian government under consideration.

The country’s competition watchdog, the Anti-Monopoly Service, recently announced plans that could force stevedores to use rubles rather than dollars for calculating tariffs. Those plans are set to be finalized by the end of the year.

Should the regulation take force as proposed, the overall value of NCSP will suffer, said Sultan Batov, head of NCSP. He added the company would not comply with the mandate to use rubles for setting all tariffs, and would only do so for coastal cargo shipments.

The stevedore pricing rule is not the only concern, as Russia also has a law in place limiting international ownership of strategic assets.

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