DeloPorts Limited, part of Sergei Shishkarev’s Delo group of companies, has sold a 25% stake plus one share in the Kombinat Stroykomplekt company (KSK) to Cargill (United States), the Russian company has announced. KSK owns the grain terminal at the port of Novorossiysk. The value of the deal was not disclosed. Representative of the American company could not be reached, the Vedomosti publication reports.
Until now, 100% of the shares in KSK were owned by the Delo group. As a result of this deal, Cargill will receive one of the five seats on the board of directors of the company. The seat will be occupied by Cargill Yug LLC’s General Director Ahmet Erturg, says the Delo group.
KSK is one of the largest grain terminals at the port of Novorossiysk. It has the capacity to handle 3.5 million tons per year. KSK’s grain handling volume increased by 34% to 900,000 tons in the 2013/2014 crop year. KSK’s share of the total Russian grain handling volume increased to 16%, according to data from the company. The total volume of grain handled in Russia reduced by 30% to 16.0 million tons, according to the Association of Commercial Seaports.
DeloPorts obtained a loan of USD 51.9 million from the Russian state bank VTB before the deal with Cargill. The loan will be used to repay a loan that Sberbank provided for financing construction of the terminal.
The American company is not the first foreign trader to buy transshipment capacity in Russia. A joint venture between the Ukrainian-based Kernel Holding and Renaisco BV (a subsidiary of the Swiss-based trader Glencore International) acquired 100% of the Efko grain terminal at the port of Taman last year. The volume of transshipment at this terminal in Taman is 3.6 million tons per year, and the deal was worth USD 265 million. Based on this amount, 25% of KSK may be worth USD 66 million, says Konstantin Yuminov, an analyst with Raiffeisenbank. It turns out that the money received may be sufficient for DeloPorts to repay VTB.
Cargill accounts for about 20% of the cargo turnover at KSK, said Timofey Telyatnik, the chief executive officer of DeloPorts. He added that the deal does not change the status of the company as an independent terminal.
Among other assets in Russia, Cargill owns two grain elevators in the Krasnodar region and a grain terminal in the port of Rostov. Cargill’s share of total grain exports from Russia is 11%, according to the company. The purchase of a stake in KSK is a logical step for Cargill, said Dmitry Rylko, the head of the Institute for Agricultural Markey Studies. According to him, it is more profitable for a trader to transship grain through its own terminal because this can lower tariffs and enable an exporter to circumvent transshipment quotas.
