Ust-Luga’s pace to IPO
Ust-Luga joint stock company implementing its ambitious project of integrated development of the Ust Luga port’s facilities in the Leningrad Region, on February 10, 2010 repaid at an agreed time the bond issue valued at 600 million rubles. The Ust Luga placed its 01-S bonds in February 2007, Marina Kondratieva, financial manager of the company said in an interview with PortNews IAA.
It was a debut loan, Mrs. Kondratieva said, the first step towards the company's stock market. The debut was a success, both in terms of the issuer (low coupon rate – 9.9% per annum), and from the perspective of the bonds acquirer (back guarantee). The total coupon payments were $14.8 million rubles.
Funds from the bond issue were allocated for construction of a multitask transshipment complex "South-2" and the development of port infrastructure, the official said, adding the company intends to continue issuing bonds.
According to Igor Golubev, analyst of NOMOS-Bank, the placement of bonds at a rate of 9.9% was quite a successful result, even for conditions in 2007. The guarantee of the Leningrad region administration that rated the Issuer’s bonds a category of quasi sub-federal bonds. A relatively small amount of the issue - 600 million rubles possible made the securities of Ust-Luga less attractive and of smaller liquidity. However, the Ust-Luga’s investors profited handsomely. Thus, in 2009, some transactions on the bonds showed income rate far above 30%.
"Noteworthy, that at the time of repayment of the loan, the business of Ust-Luga could hardly be classified as venture capital. Though the port of Ust-Luga is not currently working in full force, the construction of its major terminals is in the final phase. The interest of investors, Sibur, Transneft, Novatek, as well as the support of the state, those who are actively funding the construction of the port, turn to be the factors that might ensure interest at the stock market in case of a new bonds issue by Ust-Luga Company", Igor Golubev said.
According to Alexander Osin, chief economist of Finam Management in general, the dynamics of these placed securities was quite favorable, given the reality of the crisis. "By the end of 2009, its profitability has returned to the mark close to their pre-crisis values, i.e. to the level of 10% - 11% per annum," Mr. Osin was quoted as saying.
With the latest rated values, the company will be able to attract funding for approximately 12% per annum. "I believe the infrastructural development projects, transport sector - one of the main engines of the revival of Russia's economy. Although, to realize their potential, in the coming years the industry may need an increased public investment. This factor, given the current forecasts for the budget is a key element of risk, including the business of Ust-Luga” Mr. Osin said.
In this regard, Transport Minister Igor Levitin said last year’s fall that the government was prepared to support the issue of infrastructure bonds for development of seaports in 2010. Ust-Luga company also expected its project for integrated development of the seaport to be included in the list of projects supported by the federal budget guarantee. Read more about this in "Relevant Topics" from October 27, 2009.
Vitaly Chernov
"Noteworthy, that at the time of repayment of the loan, the business of Ust-Luga could hardly be classified as venture capital. Though the port of Ust-Luga is not currently working in full force, the construction of its major terminals is in the final phase. The interest of investors, Sibur, Transneft, Novatek, as well as the support of the state, those who are actively funding the construction of the port, turn to be the factors that might ensure interest at the stock market in case of a new bonds issue by Ust-Luga Company", Igor Golubev said.
According to Alexander Osin, chief economist of Finam Management in general, the dynamics of these placed securities was quite favorable, given the reality of the crisis. "By the end of 2009, its profitability has returned to the mark close to their pre-crisis values, i.e. to the level of 10% - 11% per annum," Mr. Osin was quoted as saying.
With the latest rated values, the company will be able to attract funding for approximately 12% per annum. "I believe the infrastructural development projects, transport sector - one of the main engines of the revival of Russia's economy. Although, to realize their potential, in the coming years the industry may need an increased public investment. This factor, given the current forecasts for the budget is a key element of risk, including the business of Ust-Luga” Mr. Osin said.
In this regard, Transport Minister Igor Levitin said last year’s fall that the government was prepared to support the issue of infrastructure bonds for development of seaports in 2010. Ust-Luga company also expected its project for integrated development of the seaport to be included in the list of projects supported by the federal budget guarantee. Read more about this in "Relevant Topics" from October 27, 2009.
Vitaly Chernov