VTB CEO Andrei Kostin announced on Tuesday that the deal for VTB to buy the Zvezda Shipbuilding Yard from Rosneft has fallen through because VTB-owned United Shipbuilding Corporation cannot finance the purchase.

VTB currently runs USC, Russia’s largest shipbuilder. It employs 95,000 people and operates 40 shipyards in Russia.

VTB stated in December last year that they were in discussions with Rosneft regarding the Zvezda purchase, stating that the consolidation of shipbuilding assets within USC is a positive thing for the industry.

The evaluation has ended. No deal is made. There won't be a deal. Kostin said that USC may not have the money yet, but it has an owner who will keep things running.

Zvezda, Russia's most modern shipbuilding yard, is specialized in building Arc7 ice class tankers capable of cutting through 2-metre thick ice for the transportation of liquified gas (LNG), from Arctic projects.

Due to the sanctions imposed by Western countries over Russia's military actions in Ukraine, Russia wants to develop its shipbuilding sector. It can no longer purchase advanced vessels or sophisticated maritime equipment. (Reporting and editing by Sharon Singleton, Olesya Almakhova, Gleb Bryanski)

(source: Reuters)