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By John Helmer in Moscow

The St. Petersburg fight over port terminal andshipping assets has taken a muscular turn, as police raiders, acting at the behest of Bank St. Petersburg, appear to be grabbing assets worth more than a bank valuation allows, and despite a court order invalidating the seizure.

Vitaly Arkhangelsky’s Oslo Marine Group (OMG) says it came under attack at its St. Petersburg headquarters last week,when police ordered personnel out of their offices and started searching office files. Arkhangelsky told Fairplay it was the latest in a series of property raids and asset seizures, which began last month, and involve OMG shipyard, vessel, and port terminal businesses.

Arkhangelsky, 34, blames Bank St. Petersburg (BSP), for improperly seizing assets for non-payment of loans amounting to Rb4 billion ($125 million). He says the asset seizures exceed the value of the loans, adding that at least one of the loan pledge agreements between his group and the bank has been nullified by a local court ruling. But since then, Arkhangelsky adds, BSP has refused to return the West Terminal, a St. Petersburgcargo shipping facility, which BSP grabbed on June 20. Three days later, on June 23, says Yelena Murgina, a spokesman for OMG, a St. Petersburg court ruled that the pledge agreement of the terminal was null and void.

According to Murgina, “the bank has refused to give back the property. When the property was pledged, it was evaluated by the [BSP] bank’s own valuers at Rb 20 billion. But with time the assets have lost a part of their price. Now the bank claims Oslo Marine had deceived them from the outset, calling a much bigger price for the assets [than was justified]. But the people who evaluated the property were the bank’s own experts, so there is no fault on the part of Oslo Marine. Oslo Marine then rejected the bank’s allegation of deceit, and so the bank seized the property.”

A briefing by Arkhangelsky and OMG papers indicate that the Western Terminal, occupying an 8-hectare site on the water at St. Petersburg, has two berths, with another in construction. It has been used primarily for loading and unloading of outsized cargoes, and for timber exports. It was bought by the group in 2007, when the BSP loan was presumably negotiated. Two other terminals, Baltic Shipping Mechanic and Onega, the Vyborg Shipping Company, and the Vyborg Port are listedamong the group’s marine assets. It also runs a logging and timber export business; a marine insurance company; and a leasing agency.

Apart from the fight over West Terminal, Arkhangelsky has filed for voluntary bankruptcy forVyborg Shipping Company (VSK). No ruling from St. Petersburg’s Arbitrazh Court is expected on that until the end of August.

Just three vessels are in the OMG fleet, despite earlier claims by Arkhangelsky to Fairplaythat he was planning to build up to 40. OMG’s website reports that between June and August of last year, it placed orders for newbuild vessels from yards in the Netherlands, Croatia, and Poland, worth a total of 492 million Euros. Barkhatova says BSP has also called in loans for the three operating vessels.

The management-owned BSP is the largest private bank in the St Petersburg region, and is backed by the European Bank for Reconstruction and Development (EBRD). The BSP spokesman, Anna Barkhatova, said: “It’s no news to [us] that Arkhangelsky accuses Alexander Savelyev [the bank chief executive and controlling shareholder] of asset raiding.” Saveleyev declined to respond directly to questions. Barkhatova was asked to clarify the bank’s claims against Oslo Marine; the total estimated debt owed to BSP by OMG; the value of the assets seized to date; and the application of the court orders to the asset seizures.

She refused, saying the answers involved commercial secrets. Instead, she said that BSP plans to hold a press conference in St. Petersburg on Thursday afternoon.

Independent port data indicate that business at OMG’s Vyborg port is picking up. There wasa 50% lift in passenger arrivals in May. In the four months to April 30, total cargo shipping through the port was337,000 tonnes; that represents 5% growth, compared to the same period of 2008.Coal, coke and chemicals for export were the main cargoes.

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