Russian steel magnate sells shipping firm operating in Sea of Azov

RUSSIA: Russian steel billionaire Vladimir Lisin has sold a shipping firm operating in the Sea of Azov to agricultural logistics group Demetra, four industry sources told Reuters, adding that the deal was negotiated before Ukrainian drone attacks on commercial vessels led to shipping restrictions in the area.

Volga Shipping, which operates small bulk carriers similar to those targeted by Ukraine, carries grain, metals and coal from the Volga and Don rivers to the Sea of Azov and the Black Sea. Its annual cargo volume exceeds 15 million metric tons. Demetra, Volga Shipping and Lisin’s steel company NLMK did not respond to Reuters requests for comment on Monday.

The four sources said that companies affiliated with Demetra and Lisin were involved in the Volga Shipping deal. Reuters could not immediately determine the value of the transaction.

Russia, the world’s biggest wheat exporter, has recently had to restrict commercial shipping in the major trade route due to the attacks on vessels, which threaten to disrupt exports.

Lisin controls NLMK, which is one of Russia’s largest steelmakers, and has slipped to sixth place among Russia’s richest individuals from the third spot he held in 2024, due to the decline of the country’s steel sector.

Demetra, which serves the lucrative grain trade with Russia’s main customers in the Middle East, Africa and Asia, has become a dominant player in its agricultural logistics sector.

The most recently available Russian corporate records show that as of the second quarter of 2024, 91percent of Volga Shipping was owned by Rumelko, a firm controlled by Lisin, while details of Demetra’s ownership structure are not publicly available.

State lender VTB sold its 45percent stake in Demetra in 2023 after consolidating agricultural assets within it over five years. Demetra said in 2023 that a company whose beneficiary was a state-owned investment fund of Oman would become a shareholder in it, without naming the company.