Weak Freight Markets Hobble Sovcomflot IPO
Russian state-owned shipping company Sovcomflot said on Tuesday that uncertain conditions in the freight market are delaying its long-planned initial public offering (IPO).
The Russian government has weighed a listing of Sovcomflot for years as part of broader privatization plans, but obstacles ranging from weak markets to international sanctions placed on Russians over Moscow's role in Ukraine crisis have prevented an IPO.
The Russian economy ministry has said it had hoped to raise 24 billion roubles ($358 million) from the sale of a stake in Sovcomflot.
Sovcomflot's chief executive Sergei Frank told reporters that shipping markets are expected to improve this year, with signs of a recovery seen in the fourth quarter of last year.
But the company will wait for the right moment to list its shares on the market, Frank added.
Over the past year, as the oil price has risen, appetite has grown in the cruise ship industry as well as in the container, cargo and tanker sectors. It is still fragile, according to Frank.
"We need that the markets return to their historical average. The fourth quarter was a joy for us, but it is not a record one," he said.
Russian energy giants including Gazprom Neft, Novatek and Sakhalin Energy, which runs Russia's liquefied natural gas plant (LNG) in the Far East, are among Sovcomflot's customers.
Sovcomflot has benefited from Russia's plans to raise its global share of the global LNG market. It has signed a strategic agreement with Russia's top LNG producer Novatek in June.
($1 = 67.0675 roubles)
(Reporting by Oksana Kobzeva; Writing by Katya Golubkova and Vladimir Soldatkin; Editing by Louise Heavens)