Decision on berths is postponed
According to data obtained by IAA PortNews, transformation of FSUE Rosmorport and FSUE Natsrybresurs (owns fish terminals in seaports) into joint stock companies being considered by the State Duma in the first reading is not likely to happen before 2023. However, final parameters of the process, inventory survey and stock check can be completed next year. The stevedoring market players insist on their right to purchase berths before the incorporation of the enterprises. The lawyers emphasize that transformation into JSC will let the enterprises attract financing and take prompt decisions without the need to have most of them approved by state bodies.
A draft law on reorganization of FSUE Rosmorport was submitted to the State Duma in mid-2021. It is currently being considered in the first reading. All the document of the new JSC will be kept by the state with the Ministry of Transport holding the authorities of a sole shareholder. According to the explanatory note date 22 November 2021, the consideration was postponed due to a decision of the Committee for Issues Relating to Economic Reform, Property and Proprietorial Relations to request and study some additional documents.
“Taking into consideration a year-long transition period foreseen by draft laws, the procedure of incorporation can be completed in 2023”, FSUE Rosmorport told IAA PortNews.
As a source close to the Rosrybolovstvo (Russian Federal Fisheries Agency) told IAA PortNews, the draft law on incorporation of Natsrybresurs was rough, hence introduction of the reorganization as an additional issue in the framework of Rosmorport reorganization already being considered by the State Duma. As far as IAA PortNews knows, it was Victoria Abramchenko, who insisted on incorporation of FSUEs in 2022. However, given the current phase of the bill, the companies will be reportedly given time for inventory survey and checking of stock. The third reading in the State Duma is not likely to begin before autumn 2022, says the source.
Neither Rosrybolovstvo, nor Natsrybresurs have responded to IAA PortNews’ inquiry. The State Duma has not commented on potential terms of the next readings. In his earlier interview with Kommersant, Rosmorport head Andrey Lavrishchev mentioned a period before the end of 2021.
Established in 1999, FSUE Natsrybresurs operates berths and piers. It runs 554 real estate units including 199 hydraulic engineering facilities and 19 vessels. Experts say, the enterprise controls up to 80% of fish cargo handling in Russia. Established in 2002, FSUE Rosmorport is responsible for safety of navigation, conducting of works and collection of dues in ports. It numbers over 2,500 real estate units with a value exceeding RUB 120 billion (subsea and surface hydraulic engineering facilities, safety systems) as well as 277 vessels.
Transformation of FSUE Rosmorport into a joint stock company will expand the list of available outside financing mechanisms, reduce the number and facilitate completion of many routine procedures as well as expand opportunities for participation in public private partnership projects, says the company emphasizing that those options are not currently available. Meanwhile, “expansion into new markets is not on the agenda today”, added the company. No renewal of rent agreements due to change of ownership is foreseen by the current legislation.
The entire asset portfolio and the fleet of the enterprises will be handed over to the joint stock company by way of universal succession. It should be reminded that Vyacheslav Ruksha, Deputy General Director of Rosatom - Director of the Northern Sea Route Directorate, has recently share his opinion on the need to hand over two diesel-electric icebreakers of Rosmorport to Atomflot for icebreaker assistance in the Arctic during the summer-autumn navigation season.
According to the explanatory note to the draft law, transformation of FSUE Rosmorport into a joint stock company is expected to increase its profit by 50%, the dividends – by at least 25%, federal tax revenues – by 20%.
The reform of state-owned enterprises has been underway for more than a year, says Sergey Uchitel partner of the Pen & Paper Bar Association. The advantages of joint stock companies bring new opportunities: the form of capital meets the requirements of international financial institutions and understandable for international financing instruments which is applicable for participation of reorganized enterprises in public private partnership projects, such as modernization of the existing ports and construction of new ones, he summarizes.
According to Oleg Lodyanov, Senior Associate, Rightmark Group, the main advantage of reorganization from FSUE into JSC is more types of transactions available for organizations, ability to make prompt decisions since they do not need to have most of them approved by state authorities.
Unitary enterprise is an outdated form with a low efficiency in the market economy conditions, believes Ilya Zharsky, Executive Partner, Veta expert group. Establishment of a joint stock company on the basis of FSUE with taking over of property which was under its operating management will let raise loans on the security of its own property, attract investments in returns of shares, emit debt securities.
The market players are anticipating active engagement of newly incorporated Rosmorport in stevedoring activities. Natsrybresurs is already involved in stevedoring activities in the fish port of Kaliningrad while Rosmorport was an operator of a Ro-Ro terminal in Ust-Luga before it sold the stevedore to Novotrans holding in 2019.
Dmitry Morozov, Chairman of the Committee for Investment Programmes on Port Infrastructure Development and Production Issues at the Association of Commercial Sea Ports (ASOP), believes that the port industry runs the same risks as those emerged during the incorporation of Russian Railways. “Holding the key production assets in ports the company can undertake commercial activities currently conducted by stevedores. Besides, decisions on termination or rejection to renew rent agreements will be made by the Board of Directors without any approval by the government which means no guarantee of stability for stevedores”, says the expert. ASOP has submitted its proposals on the bill to RF Government. It is proposed that the market players are provided with an opportunity to purchase berths currently rented by them.
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