Novorossiysk Drops as Transneft Criticizes Board: Moscow Mover

OAO Novorossiysk Commercial Sea Port fell as part-owner OAO Transneft called for a change of management at the operator of Russia’s largest Black Sea harbor.

The shares slid as much as 4.4 percent, and closed 1.5 lower at 3.75 rubles by the close in Moscow. The Micex added 0.1 percent. The company has rallied 32 percent this year, the biggest advance on the 50-stock gauge.

Novorossiysk’s board should resign as last year’s earnings weren’t high enough, Transneft Vice President Maxim Grishanin said at a conference in Moscow today. Novorossiysk may be unable to service debts next year, Grishanin said. Transneft and Summa Group control 50.1 percent of the port. Ziyavudin Magomedov, the former chairman of Novorossiysk and the founder of Summa Group, remains on the port’s board, while Marat Shaydaev, a former president at Summa, is the current chairman.

“This is just another excuse for the shareholder conflict escalation,” Nikita Melnikov, an analyst at Aton Capital LLC, said by phone. “This conflict is rather negative, Transneft’s opinion seems to have been ignored and now they’re trying to retaliate.”

Transneft Chief Executive Officer Nikolay Tokarev said the company’s opinion on the management of Novorossiysk was being ignored, the Kommersant newspaper reported on Feb. 11.

Novorossiysk has been meeting all its credit obligations and the board of directors plans to discuss the question of debt refinancing before the end of this year, the port’s press representative said by phone. Novorossiysk’s management “fully manages the tasks set before it by the shareholders,” Summa President Alexander Vinokurov said by e-mail.

Novorossiysk’s bond due in April 2015 closed unchanged, with the yield at 8.66 percent. The amount of shares traded today was about 35 million, more than nine times the three-month daily average, according to data compiled by Bloomberg.

The government has a 20 percent stake in the port operator, according to data compiled by Bloomberg.