Rosimushchestvo seeks organizers for sale of 7.8% of Sovcomflot shares to cover deficit

Rosimushchestvo seeks organizers for sale of 7.8% of Sovcomflot shares to cover deficit
Rosimushchestvo seeks organizers for sale of 7.8% of Sovcomflot shares to cover deficit

Sale of part of the state package

The Russian state has initiated the procedure for selling a portion of shares in the major shipping company Sovcomflot. Rosimushchestvo is seeking organizers for this deal. It concerns a package of 7.8% of shares, which constitutes approximately one-tenth of the total state ownership, which stands at 82.8%. This deal aims to partially cover the federal budget deficit.

Valuation and market conditions

Freedom Global analyst Volodymyr Chernov estimates the value of the share package planned for sale at approximately 15 billion rubles. This is the amount the Russian Ministry of Finance could potentially receive from the privatisation. However, the expert notes that the final revenue may turn out to be lower than previous estimates. According to Chernov, if the shares are offered to a wide range of potential buyers to ensure demand, it will likely be necessary to set a price below the stock exchange price.

Company status and its role

Sovcomflot is the largest shipping company in Russia and one of the key operators of the so-called "shadow fleet" tankers. Prior to the start of the full-scale invasion, the company possessed the world's largest fleet of Aframax-class mid-size tankers, as well as ten icebreakers.

Financial pressure on the budget

Funds raised from the privatisation will be directed to the Russian federal budget. This decision is linked to the need to finance growing military requirements. Specifically, 17.1 trillion rubles are allocated for them next year, which equals 35% of all state expenditure. Compared with the 2026 budget, military spending will increase by a third.

Deficit forecast

Despite another, already the third in the last three years, tax increase, the Russian Ministry of Finance forecasts a budget deficit of 5.4 trillion rubles in 2027. The situation in the next two years will not significantly improve: a deficit of 5.1 trillion rubles is planned for 2028, and 5.2 trillion rubles for 2029.

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