Page 16 - RusRPTOct20

Should the deal take place, this would make it the first initial public offering of a Russian state-owned enterprise (SOE) since 2016, when the state sold 19.5% in Rosneft oil major and 10.9% in Alrosa diamond major.
As reported by ​bne IntelliNews​, previously the Finance Ministry said it could attempt to launch privatisation deals in autumn 2020​, despite the coronavirus (COVID-19) crisis. Sovkomflot has been on the government's privatisation list since 2011.
Sovkomflot is ready to complete the deal in October, Finance Minister Anton Siluanov told Reuters. The company plans to raise at least $500mn from the IPO on Moscow Exchange, while keeping the state the majority shareholder at 75% plus one share.
The Ministry of Economic Development previously spoke in favour of cutting stakes in Sovkomflot maritime shipping (100% state stake), RusHydro hydropower holding (61.2%), Transneft oil pipeline operator (78.55%), Rosseti grid operator (88.04%), Rostelecom integrated telecom major (45.04%) and United Grain Company grain exporter (50% plus one share).
BCS GM reminds that the company has consistently strengthened its credit profile in recent years, with Ebitda margin jumping to 60.0% in 1H20 versus 50% in 2019 and 39% in 2019. In addition, net debt decreased by 10% half on half to $2.7bn and leverage declined to 2.7x as of 1H20 versus 3.7x in 2019 (5.4x in 2018). "On the other hand, the management announced plans to increase dividend payments to $225mn for 2020 versus $97mn for 2019, which might somewhat slow down further deleveraging," BCS GM adds.
Sovkomflot reported a ​record-high profit of $225mn under IFRS in 2019​, swinging from a loss of $45mn in 2018 and $113mn in 2017. The company's revenues were up by 10% to $1.66bn, and Ebitda jumped by 42% to $823mn.
In 2019 Sovkomflot added four tankers to its fleet. The company also struck a major deal on gas-powered tankers to service the ​Arctic liquefied natural gas (LNG) projects of Novatek gas major​, as well as two tanker deals for the Sakhalin-1 project.
2.6 ​ ​Ruble one of worst performing currencies on heightened political risk and new sanctions fears
The ruble has been one of the worst performing EM currencies recently,
falling by 10% against the dollar since the start of June. Other EM currencies have been broadly flat over this period and the fall in the ruble comes despite a rise in the price of Brent crude over the year from $35 to $40 (around 14%), despite this week’s sell off.
A string of bad news is undermining investors confidence in the currency. The sanctions threat reappeared in July as allegations that Russian officials placed bounties on US soldiers in Afghanistan surfaced, which were later​ ​debunked​.
16 ​RUSSIA Country Report​ October 2020 ​ ​www.intellinews.com