The Ministry of Economic Development and Trade discussed the privatization of Sovcomflot with potential investors. The organizers of the placement, VTB-Capital and Sberbank-CIB, estimate 25% of Sovcomflot at about 30 billion rubles. Non-state pension funds are interested in Sovkoflot shares, but then the company will have to be urgently included in the main MICEX index or agree with the Central Bank on reducing the risk requirements. Industry experts warn that SCF is a very risky asset.
On Tuesday, the Economic Development Ministry held a meeting on the upcoming privatization of Sovcomflot, three sources familiar with the privatization process told Gazeta.Ru. We are talking about the sale of 25% minus 1 share from the expanded capital of the company (Sovcomflot is now issuing an additional issue), after which 75% should remain under state control.
An official valuation of the asset has not yet been made, but the organizers of the placement VTB-Capital and Sberbank-CIB estimate 25% of Sovcomflot at about 30 billion rubles, says a source familiar with the discussion at the Ministry of Economic Development.
Earlier, the government announced its intention to receive 24-30 billion rubles for this package. But, according to the source, they will probably try to increase the price.
According to a Gazeta.Ru source, Russian non-state pension funds are actively interested in Sovcomflot shares. It was with them that the Ministry of Economic Development held a meeting.
The interest of non-state pension funds is obvious here – dividends. According to a Gazeta.Ru source, NPFs mean that Sovcomflot will remain a state-owned company, and the Ministry of Finance insists that state-owned companies should allocate at least 50% of their profits under IFRS for dividends.
True, the largest Russian shipping company is not doing well with the profit. At the end of 2016, it fell by 42% and amounted to $ 206.8 million. That is, $ 51.7 million falls to the 25% stake.
Earlier it was reported that oil and gas companies may take part in the privatization of Sovcomflot (SCF is engaged in the transportation of oil and liquefied gas). At the end of February, the Italian bank Intesa announced its interest in the asset, which provided credit financing to the commodity trader Glencore and the Qatar sovereign fund Qatar Investment Authority (QIA) during the privatization of Rosneft.
There are obstacles to the participation of non-state pension funds in the privatization of Sovcomflot. The fact is that, according to the established rules, shares acquired by NPFs must meet a number of criteria. In particular, they should be included in the 1st level quotation list (KS-1) and in the main MICEX index, which consists of 50 companies. If one of these conditions is not met, then NPFs cannot spend more than 10% of their assets on the purchase of securities.
“The problem is that almost all funds have already exhausted these 10%,” says the source of Gazeta.Ru. “And if it is still possible to introduce Sovcomflot into KS-1 during the placement, then the main MICEX index includes securities that have been traded on the stock exchange for at least six months.”
The issue of admitting NPFs to the privatization of Sovcomflot is being worked out in the government, the federal official knows, two scenarios are now being considered.
First: MICEX makes an exception and adds Sovcomflot shares to the main index without evaluation for six months.
“But there have not been such precedents yet, and preliminary consultations with the MICEX indicate that the exchange is not ready for such a step,” the official says.
The second scenario is more realistic. Considering that the activities of NPFs are regulated by the Central Bank, the Central Bank turns a blind eye to the fact that pension funds will spend money on the purchase of Sovcomflot securities that go beyond 10% of their assets. All this will be done with the expectation that in the future the company’s shares will be included in the main MICEX index.
The Central Bank “Gazeta.Ru” said that they would not comment on transactions for specific companies.
“Sovcomflot” itself is an extremely risky asset for investment, says InfraNews CEO Alexei Bezborodov. This is primarily due to the high volatility of stock quotes of tanker companies. “In this regard, only all sorts of startups are worse than them,” Bezborodov notes. – It’s one thing when investors (including the same pension funds) invest money specifically in ships, in their construction, as has been happening for several centuries in Germany and Europe. There is a short cycle, but the investor has a stable, albeit small (2-3%) income ”.
With investments in Sovcomflot shares, the situation, according to Bezborodov, is further complicated by the fact that the entire cash flow (cash flow) passes through foreign accounts, which complicates control.
Later, on Wednesday, the Ministry of Economic Development and Trade issued a refutation of the information contained in the material of Gazeta.Ru, “The government is ready to change legislation for the privatization of Sovcomflot. 10% of assets reserved for the purchase of shares not included in the 1st level quotation list, or in the main MICEX index, as discussed in the article. “Moreover, the use of this limit exempts funds from meeting the above criteria,” the ministry said.
In accordance with clause 1.5.6. Regulation of the Bank of Russia of December 25, 2014 N 451-P “On the establishment of additional restrictions on the investment of pension savings of a non-state pension fund carrying out compulsory pension insurance, additional requirements for credit institutions in which pension savings and savings are placed for housing provision of military personnel , as well as additional requirements that management companies are required to comply with during the validity period of the trust management agreement for pension savings “” at the time of the transaction for the acquisition of shares in Russian joint-stock companies included only in the list for calculating the MICEX Index, or shares in Russian joint-stock companies included only to the top-level quotation list … the aggregate value of such securities (including those purchased) is no more than 10% of the value of the investment portfolio ”.
Thus, the instruction of the Bank of Russia allows using the 10% limit. It is sufficient for the transaction. This issue was additionally discussed at a working meeting between the Ministry of Economic Development and the Bank of Russia. As a result, a position was developed on the sufficiency of 10% of the NPF limit to prepare a deal for the privatization of the company, taking into account the presence of significant demand for the deal from other categories of investors.
Also, the Ministry of Economic Development drew attention to the information that the official assessment of Sovcomflot has not yet been carried out. According to the ministry, in reality, there is such an assessment, it received a positive conclusion from the Federal Property Management Agency.