• 2021 December 8

    Lenmorniiproekt may face change of ownership

    Image source: LENMORNIIPROEKT

    FSUE Rosmorport may withdraw from the shareholders of Saint-Petersburg based LENMORNIIPROEKT JSC (one of Russia’s three major designers of ports, terminals and transport systems). The share of Rosmorport (83.65%) can attract several market players, said those interviewed by IAA PortNews. Experts believe Rosmorport is set to sell its share in view of its transformation into a joint-stock company.  

    LENMORNIIPROEKT specializes in development of sea/river infrastructure including protection structures, designing of cargo terminals and related infrastructure. As Rosmorport told IAA PortNews, it holds 83.65% of LENMORNIIPROEKT stake.

    In view of the current legislation requirements and organizational form of Rosmorport, disposal of subsidiary shares held by a federal state unitary enterprise (FSUE) through a sale transaction is only allowed by putting shares for bidding with an initial price set by an independent assessor, says Rosmorport emphasizing that it is not possible without an approval of RF Government. “As of today, there are not documents of that kind, therefore, it is too early to discuss the stock sale”, says Rosmorport.

    According to IAA PortNews, FSUE Rosmorport can later sell its complete package of LENMORNIIPROEKT shares.

    About LENMORNIIPROEKT: the company took part in construction, reconstruction and modernization of most ports in Russia. Among its customers are Severanay Zvezda, Arctic LNG 2, Yamal LNG, Rosneftbunker, Petrolesport. The institute’s current contracts include designing of an access canal in the Gulf of Ob in the Kara Sea, oil terminal of Sever Bay port, sea terminal Tuloma. In 2020, the revenues of LENMORNIIPROEKT totaled RUB 1.9 billion, net profit – RUB 323 million.   

    Reorganization of FSUE Rosmorport for its transformation into a joint-stock company is being discussed at the State Duma in the first reading. According to an explanatory note dated 22 November 2021, the consideration has been postponed.

    Five sources of IAA PortNews say that individuals close to the institute can be interested in the asset. However, two industry-related sources interviewed by the agency say the stock can be acquired by several players ready to bid. Reportedly, it can be MezhRegionTruboprovodStroy JSC (MRTS, one of contractors under seaport construction projects in the Arctic and sub-Arctic areas).

    Leonid Tozik, Director of the Design Institute “GT Morstroy” JSC, says FSUE Rosmorport seems to be interested in sale of LENMORNIIPROEKT stock in the run-up to reorganization since it is obviously not a core asset of the enterprise. Apart from LENMORNIIPROEKT and GT Morstroy, the engineering segment is also represented by Morstroytechnology  LLC. “However, a merger of other engineering companies with such a major as LENMORNIIPROEKT is questionable.  Anyway, we haven’t look into it”, – he says. – Actual interest to the shares of LENMORNIIPROEKT can be expected from the commodity companies currently involved in the Arctic zone projects and contractors deployed for those projects”, believes the expert. He also underlined that Rosmorport with its current type of organizational form would have to run a competition to sell its stock. “One competition participant will beat other bidder anyway”, comments Leonid Tozik adding that “the cost of stock can represent a substantial sum depending on the annual scope of orders implemented using the institute’s own resources and on terms and conditions of bidding”.

    According to annual report of LENMORNIIPROEKT, its revenues from design and survey works performed using the institute’s own resources totaled RUB 139 million in 2016, RUB 275 million in 2017, RUB 614 million in 2018, RUB 962 million in 2019, RUB 787 million in 2020. Thus, the Rosmorport’s share in LENMORNIIPROEKT can be estimated at over RUB 1 billion.

    LENMORNIIPROEKT General Director Igor Rusu has told IAA PortNews that Rosmorport was not considering the sale. MRTS has denied the potential purchase.

    By Yana Voytsekhovskaya


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