Top price?

Sovcomflot could have bagged more than the record price it secured from the sale of eight Arbat vessels to Primal Tankers of Greece, a London court heard today.

Ship valuation expert Nick Willis claimed the Russian tanker owner would have snared more from the deal had it handled the sale differently.

Willis, put forward by Sovcomflot as an expert witness in its $800m legal battle with its former management, said the near $180m deal struck in early 2004 looked “pretty ordinary” by the time the ships were handed over in July of that year.

(Click here to read earlier exclusive reports from the Sovcomflot corruption trial as well as the interlocutory judgments in full.)

Dmitry Skarga.

Willis, answering questions from Sovcomflot QC Andrew Popplewell having been recalled on day 58 of the trial, said it was preferable for the Russian owner to sell the vessels en bloc as there were lots of IPO buyers in the market at that time.

“If it had not been Top Ships (the listed successor to Primal) it would have been another,” Willis said.

However, he explained the ships – Arbat, Fili, Izmaylovo, Nagation, Ostankino, Presenya, Polyanka and Soloniki – were trading profitably and it would have been easy to sell them in smaller sets at a potentially better price.

Willis said: “It could have been done in groups of three or four. It was entirely in [Sovcomflot’s] hands.

“If they had done that they could have achieved a better price even than the Top Ships sale – it would just have taken longer.”

Graham Dunning QC, representing former Sovcomflot boss Dmitry Skarga, challenged Willis, noting he had previously provided evidence the price fetched for the vessels represented a record for the era.

Willis said: “By the time the vessels were delivered in July 2004 the price looked pretty ordinary, the market had risen that much.”

The Arbat, Fili, Izmaylovo and Nagation are understood to have sold at $21.8m each with the Ostankino, Presenya, Polyanka and Soloniki fetching $22.8m a piece.

According to Top Ships’ IPO prospectus it bought the eight Halla Incheon-built ships from Primal along with two former Sovcomflot Suezmaxes at $251.2m.

Sovcomflot has not challenged the sale of the Arbat vessels to Primal, but has claimed the cancellation of their sale-and-leaseback deals to Yuri Nikitin’s companies left it out of pocket.

The trial continues...

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