Palmali to fight court ruling on bankruptcy of Russian arm

MOSCOW, Dec 14 (Reuters) - Palmali, one of the biggest players in Russia’s river-to-sea cargo market, plans to appeal against a court decision declaring its Russian business bankrupt and effectively handing its fleet over to Sberbank, the shipping firm’s owner said on Friday.

Last month, a court in Rostov-on-Don in southern Russia declared the Palmali unit bankrupt. The unit owes $180 million to Sberbank, with almost all of its roughly 50 ships held as collateral with Russia’s largest bank.

Palmali also owes 1.6 billion roubles ($24 million) to Russia’s tax authorities.

Palmali’s owner, Mubariz Mansimov, told Reuters the company, which is headquartered in Istanbul and also operates in the Black and Mediterranean Seas, planned to challenge the ruling.

“We will continue legal actions against Sberbank and tax authorities of the Russian Federation,” he added. “For some reasons, Sberbank didn’t want to restructure (our debt).”

In an emailed reply to Reuters, Sberbank said bankruptcy proceeding were the best way to resolve the Palmali unit’s debt problems.

“Meanwhile, we support the company’s willingness to continue its business as usual until after the bankruptcy process is finished, this would help to preserve the fleet and workers,” Sberbank said. Palmali has around 3,500 staff in Russia.

The company has handled large volumes of non-pipeline oil and products exports, plying routes between refineries in the Volga region and Black and Azov Seas. One of its main clients is the Novoshakhtinsk oil refinery in southern Russia.

However, it has suffered from cheaper transport options, such as railways and pipelines.

River shipments in Russia, which include cargoes of grains and construction materials, oil products and cars, fell 6.4 percent in 2017 from the year before, according to KPMG.

Western sanctions imposed for Moscow’s role in Ukraine’s crisis have also hit some shippers. Mansimov said the sanctions “paralysed” the firm, which uses the Russian flag on most of its vessels operating in Russia.

“We can’t enter Ukraine with a Russian flag aboard. There is also pressure from the Western companies. They just don’t want to hand their cargoes to a Russian flag,” he said.

$1 = 66.3917 roubles Reporting by Vladimir Soldatkin; additional reporting by Tatiana Voronova and Gleb Stolyarov; Editing by Katya Golubkova and Mark Potter