vlad.tribnet.com / Issue #152 / Business / Reading article...

As it celebrates its 100th anniversary, the Vladivostok Commercial Sea Port is ready to release more than $10 million in new shares within the next two months, pending a Nov. 5 shareholders’ vote.

A resolution to issue the shares, which requires a 75 percent majority, is not expected to pass without the support of the federal government, which owns a 20 percent share in the company.

If accepted by the board of directors, the issuance will constitute approximately 25 percent of the port’s capital after the shares are purchased. They will sell at a minimum of 1.7 cents each.

The issuance’s future remains uncertain, however, because shareholders, particularly the government, may shoot it down.

“The behavior of the government is a bit of a wild card,” said Andrew Fox, Chairman of Tiger Securities Vladivostok, who is also the Deputy Chairman of the Commercial Port’s board of directors. “I think there’s about a fifty-fifty chance for it.”

Government officials said that their decision on the stock wouldn’t be made known until Oct. 25.

Fox has been working over the last six months to find buyers interested in the commercial port. He is now confident that if shares are released, they would be snapped up quickly, he said.

The decision to release shares comes in part because the port would like to begin work on a project to upgrade a number of facilities. But foreign investors have stipulated that they will not invest unless the port casts 10 percent of its own funds into the pot. The entire project is estimated at $100 million.

After agreeing to this deal, financial companies working for the port reviewed the possibility of issuing bonds, taking credit from a bank and issuing new shares, officials reported.

The port’s supervisory council agreed recently that a stock issuance would be most beneficial to the joint stock company, said Igor Kozchenko, general director of port’s daughter company Portinvest, which will help to handle the share release if it occurs.

The first aspect of the project will be to build a terminal that can better use Vladivostok’s link to the Trans-Siberian railway.

The port is eager to compete more directly with Vostochny Port, near Nakhodka, where container services are more developed than the Vladivostok Commercial Sea Port’s.

The port also hopes to build a larger oil storage facility, and officials would like to construct a pier designed specifically for timber trade.

In addition, the port hopes to design an area where logs can be milled into lumber before leaving the harbor, Kozachenko said.

Besides these big projects, port officials also hope to increase ancillary services, such as providing fresh water and fuel to incoming ships, Fox said.