Huge Cod Quotas of Auctioned Russian Fishing Combine Wetting Investors' Appetites

To plug the budget gaps due to the forthcoming single social tax cuts towards better business climate, the Russian Government is putting up for sale more of its valuable assets in various industries including the last government-owned fishing combine Arkhangelsk Trawl Fleet - the 10-year quota share holder with more than 20 000 tonnes of annual cod fishing rights, according to the Russian Fish Insider Report published by http://www.megafishnet.com/.

The auction is expected to take place as early as this autumn though the exact date has not been announced as per early July.

The news has spread fast and Russian investors are already gearing up to buy the juicy assets. The 10-year (2009-2018) quota shares are certainly the most interesting part and their value is set to grow further as the rights will most probably be extended from 10 to 20 years after 2018. At least such proposal has been put forward by Russia's fishery head Andrey Krainy. Besides, the cod and haddock resource is jointly managed by the Mixed Russian-Norwegian Fisheries Commission and the stocks are doubtless in good shape.

Table 1. OFFSHORE capture quotas of Arkhangelsk Trawl Fleet in 2006-2011

Note. The table has been compiled by Russian Fish Insider Report (http://www.megafishnet.com/) from official figures of Russia's Federal Fisheries Agency.

Table 2. Сapture quota shares of Arkhangelsk Trawl Fleet for offshore and inshore fishery as well as for fishery in the areas under the jurisdiction of the international agreements of the Russian Federation in 2009-2018

Note. The table has been compiled by Russian Fish Insider Report (http://www.megafishnet.com/) from official figures of Russia's Federal Fisheries Agency.

The combine owns a fleet of 21 fishing vessels (middle and large trawlers), a fish processing plant, a developed coastal infrastructure containing port's cargo area, warehouses and coldstores.

Apart from domestic sales, ATF has been successfully operating on the world market exporting cod, haddock, herring, blue whiting and mackerel. It offers not only commodities but also such premium-class products as scallops, cod's tongues and cheeks.

Many of the boats have EU approval and the company has been able to remain profitable, what is not typical for government-owned combines. In particular, it is reported that it made a net profit of nearly USD 1.5 million even in the crisis year of 2009.

Arkhangelsk Trawl Fleet is currently being assessed and without official value figures yet it is speculated that the auction price may start from $250 million.