Ust-Luga Is Visibly Rising in Price
OREANDA-NEWS. November 12, 2012. At the end of the last week the government of Leningrad region published the data about revaluation of the shares of "Ust-Luga Company" JSC building the largest port of Russia with the capacity of 120 mln. tons. In the opinion of independent experts, the price of the 25% block of "Ust-Luga" has grown from 600 mln. to 1.4 bln. rbl. since the end of 2006. Thus, over about a year the company value has grown 3.3 times up to 320 mln. dollars. Over the several recent years the company that used to be controlled by offshores has obtained two transparent portfolio investors that are now actively crediting it.
According to the latest report for the third quarter of 2007, the company’s net asset value amounted to 287 mln. rbl. (2.4 times above the level of 2006), the total payables amount is at the level of 2.3 bln. rbl. By the results of the third quarter the proceeds amount to 133 mln. rbl., the net profit is 4 mln. rbl. Shareholders: "New resources" JSC — 20.04%, the Investport Holding Foundation — 14.72%, "Absolute" Group of companies — 15.24%, "RRW" JSC — 8.52%, "National capital" JSC — 16.48% (owned by "Trustfin-M" LLC related to Transcreditbank), 25% plus one share belong to the government of Leningrad region.
According to the government of Leningrad region, the share value growth noted by the specialists of "International evaluation center" JSC enabled officials to meet the request of "Ust-Luga" management regarding granting additional guarantees of the borrowings on security of the block of 25% plus one share already pledged by the finance committee of Leningrad region. In 2006 this block secured guarantees for 600 mln. rbl. while now their size has grown up to 2 bln. rbl. According to Igor Artemenkov, general director of "International evaluation center" JSC, who has been the appraiser of "Ust-Luga" for more than four years, the reason for the share value growth is both the large volume of the investments made by companies in the port construction and the land price growth as well as the higher forecasts of the financial rate of return with account of the changing world port market. Igor Artemenkov is sure that "Ust-Luga becomes a unique port and it will be in increasingly high demand in future".
Experts have questions concerning evaluation of the company’s prospects based on financial indicators. "If the net asset value is eight times less than the size of indebtedness, such a project arouses many questions from the point of view of risk assessment; my company would not invest in such a project," says Valentin Levitsky, senior adviser of the Russian technological fund.— "High risk venture investments suppose this correlation to be 1:1".
According to the appraisal of the international evaluation center, the value of the 15.24% block of shares of "Ust-Luga" purchased by "Absolute" Group in 2006 for 20 mln. USD may currently exceed 48 mln. USD. Simultaneously with the purchase the bank of "Absolute" company announced opening of a credit line of 10 mln. USD. Back then the chairman of the board of directors of "Ust-Luga" Valery Izrailyt promised that the value of his company would grow and "Absolute" would be able to get good speculative gains.
In addition to that, since the moment of revaluation of the company’s share value there have appeared more prerequisites for its growth. Last week it became known that the federal authorities approved of the new general scheme of Ust-Luga port development according to which the port will become the largest port of Russia with the capacity of 120 mln. tons by 2015. Such an increase of the scope of work would be impossible without support of both "Ust-Luga" shareholders (the RRW and Leningrad region) developing the railway approaches to the port and allocating state guarantees and land plots and the federal government. In particular, one can shortly expect solution of the question about construction of oil and oil products supply pipelines towards Ust-Luga.
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