Summa to Offer Buyout to Fesco Investors After Gaining 70%

Summa Group, an investor in Russian ports and a Rotterdam oil terminal, said it will boost its stake in Fesco Group to 70 percent to expand in Russia’s freight market, and will offer to buy out minority investors.

Summa signed an agreement to buy 56 percent of Far Eastern Shipping Plc, as the company is also known, from businessman Sergey Generalov, Summa President Alexander Vinokurov told reporters today in Moscow. Summa now holds 15 percent, he said.

Summa, co-owner of Russia’s largest port operator, Novorossiysk Commercial Sea Port, is aiming to benefit from the consolidation of Russia’s freight industry, Vinokurov said. Non- state transportation groups are expanding as the government sells stakes in port and rail operators. The acquisition will also allow Summa to enter the rail container market, he said.

“The deal will help us expand geographically and gain access to the Pacific basin, a key area along with the Baltic and Black seas, where Summa already works,” Vinokurov said.

Fesco surged 29 percent, reaching 11.885 rubles a share at the close in Moscow, the highest level in three months.

Summa plans to make a voluntary offer to buy out minority shareholders in Fesco after the deal closes in the coming weeks, Vinokurov said, declining to say how much Summa may pay. The company is in talks about purchasing the European Bank for Reconstruction & Development’s 3.76 percent stake and plans to approach East Capital, he said. East Capital, based in Stockholm, holds a 7.15 percent stake, according to Fesco’s website.

Summa has already made an advance payment and arranged for a loan, Vinokurov said. He declined to give the cost of its acquisition of Fesco shares, saying only that it was “close” to earlier press reports. In May, people with knowledge of the plans said the deal would cost Summa about $1.4 billion.

To contact the reporter on this story: Ekaterina Shatalova in Moscow at eshatalova@bloomberg.net

To contact the editor responsible for this story: Denis Maternovsky at dmaternovsky@bloomberg.net

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