The EBRD has acquired a 2.98 percent stake in Global Ports Investments PLC, the leading Russian independent container and oil products terminals operator, as part of a successful Initial Public Offering on the London Stock Exchange (LSE) which raised USD 588* million for the company.
Today’s USD 70 million EBRD investment demonstrates the Bank’s commitment to the development of Russian infrastructure and is part of a strategy to support companies seeking funding on international capital markets, particularly those active in key economic sectors where there is a significant requirement for long-term investments.
Following the IPO, the free float represents 25* percent of Global Ports’ issued capital. Investors were offered Global Depository Receipts each representing three ordinary shares in Global Ports’ equity. The EBRD’s share of the total placement was 11.9* percent.
This is the first transport and infrastructure IPO from Russia and Eastern Europe since the 2008-2009 financial crisis, and its success shows the opportunities for private players to attract capital for modernization projects aimed at increasing capacity to handle growing cargo volumes, said Varel Freeman, the EBRD’s First Vice President.
Today’s IPO has in addition given the EBRD an opportunity to support the badly needed expansion in order to eliminate bottlenecks in the country’s transport system and make terminal services accessible to a larger group of customers, a development in which private terminals have a vital role to play, Mr. Freeman added.
Global Ports is part of Cyprus-registered Transportation Investments Holding Limited (TIHL), a private Russian transport and infrastructure group which goes under the brand-name N-Trans. In 2008, the EBRD invested USD 49.55 million in a 3.2 percent stake in Globaltrans Investment PLC, the Russian private rail operator controlled by N-Trans, during its IPO on the LSE.
The proceeds raised by Global Ports through this share purchase by EBRD will be used for capital investments in Global Ports’ infrastructure in Russia, including replacing older equipment with more environmentally friendly and energy efficient versions one of the Bank’s major priorities. Energy costs (fuel, electricity and gas) have a significant impact on the price-formation of the group’s products.
Thirty percent of the container traffic going through Russian ports transits through Global Ports’ container terminals while its oil products terminals handle 28 percent of fuel exports from the countries of the Former Soviet Union. Located in the Baltic and the Russian Far East, Global Ports’ terminals serve as key gateways for Russia in both these important areas of international trade.
*assuming the over allotment option is fully exercised