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A 20% stake in Kadina Ltd., which holds a controlling share in the Novorosiysk commercial sea port (NMTP), may be sold to Mr. Rotenberg at a price close to the IPO. We are upbeat on the news. For one part, the investor is to pay a 20% premium on the share package that does not even have blocking rights. For another part, the emergence of a shareholder close to government circles is to strengthen the company's lobbying position.
According to the Vedomosti newspaper, a deal to sell 20% in Kadina Ltd., the holder of a controlling interest in Novorosiysk Commercial Sea Port (NMTP), is in the works. The deal is valued at USD 490 mn, or USD 0.2544 per share. According to the same source, Mr. Rotenberg, an acquaintance of Vladimir Putin, may act as the buyer of the asset.
In our view, the main goal pursued in the sale of a share package in Kadina Ltd. is to strengthen NMTP's lobbying position in its relations with the transport monopoly companies Transneft and Russian Railways Company (RZD) and the Federal Tariff Service (FST). Given the expected price of the deal, a premium on the share package may reach about 20%, while the selling price should be around the price used in the IPO held in November of last year.
We believe that the news is upbeat for NMTP. On one hand, an investor is prepared to pay a 20% premium on the share package that does not even carry blocking rights. On the other, the emergence of a shareholder close to government circles strengthens the company's lobbying position. We reiterate our SELL recommendation on NMTP shares at least until the company releases its FY 2007 financial results. The target price is USD 0.153 per share as of year-end 2008. Vladimir Sergievskiy
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NSCP
Capitalization: $1 155 408 924,00
Common shares:
Price: $0,063
Delta week: 4,2%
Delta month: -10,7%
Delta year: -76,4%
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0.553
1.6
