A total of 16,738 shares will be offered on the Vladivostok International Stock Exchange on Jan. 13, regional property fund officials said Monday.
The Far Eastern Shipping Company, or FESCO, with a virtual monopoly on trade routes to Asia, has attracted a number of Western portfolio investors. The 20 percent state-owned company, which has sold 52 percent of its shares to its employees, recently sold a 9.4 percent stake to foreign investors which included U.S. banking group Citicorp and CS First Boston, company officials said.
The remaining shares are held by the regional property fund, which is selling the 1.03 percent stake in January.
The company's shares were quoted at around $50 by Moscow brokers last week. Current prices give FESCO a market capitalization of around $110 million and the company is one of the most actively traded on the Vladivostok exchange. The company has book assets of nearly $1 billion.
Company officials have said that FESCO needs to raise between $70 million and $90 million over the next five years to remain competitive. The money would be spent mainly on updating the company's fleet of 177 ships, half of which are more than 20 years old.
Last month, FESCO signed a $32.7 million loan agreement with the European Bank for Reconstruction and Development that will help it finance a contract to buy three Polish-made container vessels which officials say will cost $60 million. The shipping firm spent $45 million on two new Polish container vessels last year.
FESCO officials have said they hope to raise more money by selling off the government's 20 percent stake. The sale would also open the way for a new stock offering.
FESCO has slashed its work force to 17,000 employees from some 60,000 in the 1980s. It has also diversified, investing in a trading company that runs car dealerships and a hotel in Vladivostok.
(Reuters, MT)
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