Government setting up Commission to look into feasibility of giant Rosrybflot State Corporation

April 1, 2008 12:12
Under the Russian Federation Government' order, on March 11, 2008 an interdepartmental commission was set up to study feasibility of proposed Rosrybflot State Corporation, according to Russian media reports.

According to the Head of the Russia's State Fisheries Committee Andrey Krainy, subject to approval, this move would further the development of the nation's fishery industry. He has also added that the establishment of a single government-owned company would help lift bureaucratic barriers, allow to unite all government assets and modernize the fleet.

The market share of the company would total 5-7%, what would not interfere with the development of private fishery business, believes Andrey Krainy. The Company's fleet would catch fish in the open part of the oceans where for small private-owned vessels fishery will not normally be profitable.

Rosrybflot is planned to be created on the basis of Arkhangelsk Trawl Fleet (plc). Initially, there would be 24 vessels in its fleet. Should the public-limited company established, The Russian Federation would be able to increase the annual catch in all waters by almost a third from 3 million 250 thousand tonnes to 5 million tonnes, supposes Andrey Krainy.

According to the head of the Russia's State Fisheries Committee, the draft order to set up Rosrybflot Corporation is already being developed in the Committee jointly with The Ministry of Economic Development and Trade of the Russian Federation.

The State Corporation

The State Corporation will have audited IFRS accounts (International Financial Reporting Standards). According to Andrey Krainy, a pack of the corporation's shares will probably be sold on the open market. Now the project's organizers discuss variants of selling from 25% to 49% of the corporation's shares to private investors. Andrey Krainy says that they should start from selling a blocking pack of shares and later when the company's capitalization increases another 24% can be sold. At the same, Krainy has made it a point that the state should certainly have the gold share in order to secure additional guarantees when selling such a big pack of shares, Andrey Krainy noted.

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