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IST Group Sells Stake in Severnaya Verf Shipbuilder
United Industrial Corporation announced yesterday it bought out from IST Group a 18.71-percent stake in Severnaya Verf in line with the cooperation agreement made between IST Group and United Industrial Corporation for all future defense orders of Severnaya Verf.
Severnaya Verf shipyard is one of the largest ship-building yards in Russia. Today’s order portfolio exceeds $2 billion, including construction of two destroyers for China (Project 956 EM) and corvettes for Russian Navy (Project 20380). Majority holder is United Industrial Corporation, which also managers industrial assets of Mezhprombank.
The above sale ended the industrial war run between Severnaya Verf and Baltiisky Zavod (Baltic Works) for years. In 2001, IST Group acquired 18.71 percent in Severnaya Verf. As a minor holder, in spring of 2002 it put forward its representatives to Severnaya Verf’s BOD and audit committee, but was rebuffed by NPK Holding, then majority holder in Severnaya Verf. In 2003, NPK sold its stake to Mezhprombank. Therefore, with the 18 percent in Severnaya Verf bought out from IST, the United Industrial Corporation has ammassed 72.19 percent in the company. Russia’s government holds 20.96 percent though RFFI.
The agreement made between IST and United Industrial Corporation provides for the joint implementation of defense shipbuilding projects. The parties agreed that defense orders will be piled up in Severnaya Verf, while the Baltiisky Zavod (where IST has 88.2 percent) will render engineering assistance. The first project sets forth joint bidding for construction of destroyer leader for Russian Navy (Project 22350). The tender is expected to be announced April 14. The bid was submitted on behalf of Severnaya Verf but backed up by the Baltic Works. The competitors are Northern Dvina’s Sevmashpredpriyatie, which is tipped as favorite, St. Petersburg Admiralteiskie Verfy and Kaliningrad Yantar.
The above agreement covers only domestic defense orders, Anton Laptev, head of the PR and foreign ties department at IST Group, specified, adding that all issues related to foreign contracts will be solved by IST Group and United Industrail Corporation while sealing such contracts. Alexander Gnusarev, BOD chairman of the United Industrial Corporation, assured Kommersant the scope of Severnaya Verf’s activities covers both domestic and foreign orders. A source close to the company told Kommersant one of the awaited contracts sets forth construction of the three destroyer leaders for India.
However, a source with Rosoboronexport (government’s intermediary in defense and technical cooperation) pointed out that “the agreement may complicate the talks with the Indian Defense Ministry for construction of three additional destroyer leaders under Project 11356". The first three vessels were constructed by the Baltic Works and the Indian clients may oppose any changes in the contract executor, as the Baltic Works has all technical documentation available and the ties have been already established, the source said.
www.kommersant.com
All the Article in Russian as of Apr. 12, 2005
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