July 2 (Bloomberg) -- Russia’s government has agreed to a plan to divide the country’s largest port operator, OAO Novorossiysk Commercial Sea Port, between its two controlling shareholders to end a battle that has stalled spending on oil terminals, according to two people with knowledge of the deal.
The Federal Property Management Agency sent President Vladimir Putin a request to approve the proposal to split off the port group’s oil terminals to state-run pipeline operator OAO Transneft, according to the people, who asked not to be identified because they’re not authorized to speak on the matter. Businessman Ziyavudin Magomedov’s Summa Group would gain control over the port group’s remaining business, they said.
The agency also asked Putin to decide whether the state will sell its 20 percent of NSCP Group, as the port group is known, before or after the split, the people said.
NCSP Group, which handles about 33% of Russia’s crude exports, has been unable to approve investments to expand its oil division during the more than yearlong shareholder conflict. Russia depends on oil and gas for half of the government’s revenue.
Transneft and Summa together control 50.1 percent of NCSP through their jointly owned Novoport Holding Ltd. Transneft will receive the oil-loading facilities, including the Primorsk port on the Baltic Sea and Sheskharis terminal at Novorossiysk on the Black Sea, while Summa will buy Transneft’s stake in NCSP, which will keep the non-oil assets, the people said.
After the deal, Summa will control 60 percent of the port operator, the people said.
The property agency proposed that NCSP pay out a special dividend before the deal to benefit minority shareholders, the Vedomosti newspaper reported earlier this year. The people declined to comment on whether a decision has been made.
Vladimir Ryzhov, a Federal Property Management Agency official, and Evgeny Timoshinov, a spokesman for Summa, declined to comment. Igor Dyomin, Transneft’s spokesman, said that the companies have agreed on the structure of the deal, while saying he was unaware of any government decision.
To contact the reporter on this story: Ekaterina Shatalova in Moscow at email@example.com
To contact the editors responsible for this story: Alaric Nightingale at firstname.lastname@example.org Torrey Clark, Scott Rose