Putin Orders Transfer of Rights to St. Petersburg Airport from Foreign Investors.
St. Petersburg, Russia: In a move asserting Russian “sovereignty” and amid tensions with “unfriendly countries,” President Vladimir Putin has ordered the transfer of management rights for Russia’s second-busiest airport, Pulkovo in St. Petersburg, from foreign shareholders to a new domestic entity.
The shareholdings in the Cyprus-registered concession that operates Pulkovo airport will be consolidated in a new Russian company, with existing investors, including Germany’s Fraport AG and the Qatari wealth fund, retaining their stakes but losing voting rights.
The consortium managing Pulkovo’s concession consists of German airport operator Fraport, the Qatar Investment Authority, Russia’s VTB Bank, and a group of investors, including Russia’s sovereign wealth fund RDIF, Abu Dhabi’s sovereign fund Mubadala Investment Co., and Baring Vostok.
Putin’s order follows earlier Kremlin actions against “unfriendly countries” in response to measures taken against Russia for its war in Ukraine.
The transfer of management rights is seen as part of Putin’s strategy ahead of a potential bid for a fifth presidential term in March elections.
Pulkovo airport, the busiest in Russia after Moscow’s Domodedovo, served 17.5 million passengers through October this year.
Putin’s decree relies on laws predating the Ukraine invasion and cites a “threat to the national interests and economic security of the Russian Federation” due to the violation of obligations by certain foreign legal entities.
While Germany is considered “unfriendly,” Qatar and Abu Dhabi are not. The decree potentially allows Middle Eastern investors to regain voting rights upon application and compliance with Russian legislation. The order differs from earlier Kremlin takeovers based on legislation signed in April, allowing temporary state control over assets of companies from “unfriendly states.”
Fraport is evaluating the consequences of the decision, having already written down the holding’s value to zero following the Ukraine conflict. The Qatar Investment Authority and Mubadala declined to comment. Pulkovo airport welcomed Putin’s order, stating it would “restore corporate governance mechanisms.”
Source: Bloomberg News
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