As correctly forecast in the June 2013 edition of WorldCargo News (p1), Global Ports Investments (GPI), in which APM Terminals and Russia's N-trans are co-controlling shareholders, each with a 37.5% stake, is to acquire Russian port operator National Container Company (NCC), curently controlled by Andrei Kozbar and Vitaliy Yuzhilin (Quantum Ports/First Quantum). The deal is subject to regulatory approval by relevant authorities.

NCC is currently the biggest container handler in the Russian Baltic, owning First Container Terminal in St Petersburg and its associated inland port (Logistika Terminal) in Shushary and an 80% stake in the emerging Ust-Luga Container Terminal (ULCT). It also operates Ilichevsk Container Terminal in the Ukraine. Last year FCT and the nascent ULCC handled 1.69M TEU and NCC generated revenues of US$253M and EBITDA of US$164M.

GPI controls the Petrolesport and Moby Dik (Kotlin Island) marine container terminals, the Multi-Link container terminals in Helsinki and Kotka, the Yanino inland port in Saint Petersburg, the Vopak EOS oil products terminal in Tallinn and, on the RFE range, the key Vostochniy Container Terminal.

Its intended acquisition of NCC is through a combination of a cash consideration, new shares representing approximately 18% of the enlarged share capital of GPI and assumption of debt of NCC, leading to a combined enterprise value of around US$1.5B.

In effect N-trans is buying back into NCC. The then Severstaltrans (name changed to N-trans in 2008) sold its 50% stake in NCC to Fesco for US$375M in 2006. Later, Fesco's Sergei Generalov and First Quantum's Vitaliy Yuzhinin fell out over the scale and pace of NCC's investment projects in the light of the 2008-09 downturn.

At that time, the future ULCT was still under development and NCC's Ukrainian affiliate Ukrtranscontainer was involved in a bitter dispute with the Ilichevsk port authority. Fesco sold its 50% stake in NCC to Andrey Kozbar in July 2010 for US$900M, in effect valuing the whole of NCC at that time at US$1.8B. 

Russian media have speculated that the Russian regulatory authorities would baulk at the tie-up of GPI and NCC as it creates a practical monopoly of container capacity in the Russian Baltic. Fesco ruled itself out of bidding to buy back into NCC, but GPI, Summa Group and UCL Holding were all mentioned as potential suitors. However, Summa is focused on Novorossiysk while UCL Holding is also understood to be looking for a strategic partner to take its own port plans forward.