GUNVOR SELLS RUSSIA

Gunvor, the group that used its dominant position in the Russian oil market to build one of the world's largest trading businesses, is to significantly reduce its footprint in the country.

Gunvor is seeking buyers for a significant part of its Russian assets, including its huge oil products terminal in the Baltic sea. It marks a further attempt by the trading house to diversify its business interests after it was dragged into a political battle regarding Ukraine.

The company was shaken earlier this year when the US Treasury placed sanctions on its co-founder, the Russian businessman Gennady Timchenko, and claimed President Vladimir Putin was a secret investor in the company.

Gunvor has strenuously denied any links with the Kremlin or Mr Putin and Mr Timchenko has sold his 43 per cent stake to co-founder Torbjörn Törnqvist, pictured. Some US banks, however, still refuse to deal with the company.

The trading house was founded by Mr Timchenko and Mr Törnqvist in 2000. It started with a focus on trading Russian oil, securing much of the supply of major producers Rosneft and TNK-BP .

It now one of the world's largest independent oil trading companies and trades more than 2m barrels of oil a day, equivalent to the consumption of France. Currently, 13 per cent of Gunvor's crude oil originates from Russia.

Through the sale of its Russian assets, Gunvor hopes to not only significantly de-risk its business in the eyes of western lenders but also generate cash to help fund acquisitions in other parts of the world.

The Geneva-based trading house has already entered new markets, such as metals and coal, and is looking at potential acquisitions in Europe, the US, South America and Asia.

Although it has not completed the sale of any assets, the company is close divesting its stake in Kolmar, an owner of coal assets in eastern Russia, according to people familiar with the situation.

It is also seeking buyers for all or part of Ust-Luga, one of the world's largest transshipment terminals, as well as its 50 per cent stake in the Novorossiysk Terminal on the Black Sea. Gunvor's other Russian assets include a pipeline and oil exploration company.

"Russia is Gunvor's heritage, not its future," said the person.

However, traders said it would not be easy to find non-Russian buyers for Gunvor's assets. Many of the likely purchasers are themselves under US sanctions. Mr Timchenko is a co-investor in Kolmar, making him an obvious candidate to buy out Gunvor's stake, while traders said that Rosneft may be a natural buyer of Ust-Luga.

In a statement, Gunvor said as part of its ongoing diversification strategy it was considering acquisitions and divestments.

"Since a significant portion of our investments are in Russia, over time Gunvor will be looking to sell selectively part of those assets. We do not expect this will have any impact on our existing trading activities in Russia," the statement read.

ft.com