Summa completes the acquisition of FESCO29 November 2012
Extensive negotiations on acquisition of FESCO group seem to near their end as the deal must be closed in the coming days soon. The amount of the deal is estimated at over USD900 million.
Originally Summa failed to get loan from Russian banks, including Sberbank, and had to invite international sources of finance. So the deal was delayed several times. Finally the main lenders will be ING, Goldman Sachs and Raiffeisen. The total amount of syndicated loan will reach about USD700 millions.
The deal will cover 56% of Far Eastern Shipping Co. Besides of that 9% of 13% FESCO’s treasury stock was sold in the H1 2012 for USD78 million to undisclosed buyer, supposedly affiliated with Summa. As a result Summa will control Vladivostok Commercial Seaport, Transgarant, Russkaya Troyka, Dalreftrans, about 20% of Transcontainer as well as several other transportation companies. Part of FESCO fleet including 25 conventional vessels will remain outside of the deal.
The consolidated revenue of FESCO in the H1 2012 was USD582,5 million. Loss due to fleet revaluation and currency exchange was USD60 million. CompanycapitalizationisintheregionofRUR29 bn.
According to Summa there is a possibility the FESCO will get another minor shareholder, which can finance up to 20% of the deal. In any case Summa would become FESCO’s dominant shareholder. Other shareholders of FESCO include East Capital fund (7%) and EBRD (3,7%), about 20% of FESCO stock is floated on the market.