The Baltic Course  

Finartis Casts Off from Muuga Port

Finartis Moscow, a leading Russian investment firm, has opted to sell its stake in Dry Bulk Terminal (DBT), located in Tallinn’s port of Muuga.



Muuga is Estonia's key commercial port, with total cargo turnover accounting for approximately 90% of the national turnover and nearly 70% of that of Tallinn Port JSC.  Muuga’s water area, which covers 350 hectares, and the adjacent territory, covering 752 hectares, are enormous by European standards.  The port, which is vital to the health of the Estonian economy, had long been in need of upgrading.

At the time of the sale, DBT had benefited from an investment program, was running at full capacity and had begun to yield stable income for investors. "It is at this point that a classical venture investor sells its stake to a strategic investor," – commented Rustam Aksenenko, CEO of Finartis Group, the parent company of Finartis Moscow.

Finartis, established five years ago, provides asset advisory services to qualified individuals willing to invest capital in promising projects throughout Europe. The company's top management stated that the completion of the Tallinn project marks Finartis’ exit from the transport sector.  Going forward, the company will focus on a more diversified portfolio of projects in a variety of sectors across Eastern and Western Europe.

Western experts observe that Finartis' project in Muuga is an exemplary one.  In 2003, net profits at DBT's were US$ 5.63 million and total sales amounted to US$ 17.35 million.  Finartis’ tenure as a shareholder saw a technically outdated terminal replaced with one of the most cutting-edge port facilities in Eastern Europe.

Presently, DBT has total storage capacity of 140,000 tons, half of which is under one roof; and four independent hemispherical domes ensuring against product cross-contamination, thus increasing the range of products the terminal can handle.  Each of the domes has a load capacity of 15,000-18,000 tons of cargo.  The terminal also has a 288 meter-long quay.

These facts are especially significant in view of Muuga’s importance to Russia’s ability to export mineral fertilizers to Europe, Latin America, the U.S. and China.  Therefore, the terminal's standing as a top-class mineral fertilizer storage facility is justified from all angles, which is important considering that the buyer of Finartis’ stake is Panama-based Izofert Trading, Inc., a major player in the fertilizer market and the principal consumer of DBT's services.

The Estonian side has not been placed at a disadvantage, however. As before, DBT’s management holds 10% of the company’s preferred shares, with Estonian-based investors holding an additional 45%.