Russia And Singapore Create Airports JV
Russian tycoon Oleg Deripaska, state lender Sberbank and Singapore's Changi airport will create an airport business joint venture aimed at developing airports that will be used for the 2014 Winter Olympics in Sochi.
The three parties said in a joint statement that Deripaska's Basic Element investment group will hold 50 percent plus one share in the joint venture, Changi Airport will hold a 30 percent stake, and Sberbank will get 20 percent minus one share.
Basic Element, the biggest shareholder in the world's largest aluminium group UC Rusal, said it already owns a cluster of airports in the Black Sea resort town of Sochi and the southern Krasnodar region and now wanted to improve their capitalisation.
Russia will host both the Winter Olympics in 2014 and the football World Cup four years later, and desperately needs to improve infrastructure including roads, hotels and airports ahead of the two global sporting events.
Sberbank chief executive German Gref said the bank would invest USD$120 million in the joint venture, while Changi said it would inject USD$200 million.
"It is a financial investment for us. We do not manage airports and do not intend to," Gref told reporters, adding that the bank would look to exit in five to seven years -- possibly via an initial public offering (IPO).
"We see great potential for value increase in Krasnodar region airports, especially in view of the upcoming 2014 Olympic Games in Sochi, as well as the World Cup that Russia will be hosting in 2018," he added.
The joint venture is expected to be completed in the second quarter of 2012, subject to final negotiations and regulatory approval.