Sanctions HS information: Helsinki’s mysterious shipyard in serious difficulties due to sanctions, the company’s lease agreement with the city in jeopardy

In Hietalahti According to information obtained by HS, the Helsinki Shipyard shipyard in the center of Helsinki is in serious difficulties due to the EU’s economic sanctions and Russia’s invasion of Ukraine.

According to HS, the ships of the Russian-owned shipyard are threatening to be subject to an export ban imposed by the EU, and the city of Helsinki is even wondering whether the Russian shipyard may operate in the center of the Finnish capital in the future.

The yard, owned by the Russian investment company Algador Holdings, has 450 employees. In addition, it employs 700 subcontractors.

Telakan the situation has escalated rapidly. Only in January Helsinki Shipyard said it had received it a significant order from the Russian mining and metals company Nornickel.

The employment effects of the order were estimated at about 2,100 person-years at the shipyard and more broadly in the maritime industry at that time. Planning for the burglar has already begun and work is scheduled to begin next year. It should be ready in 2025.

Now the future of the icebreaker project is uncertain. The EU decided February 26 bans the export of seagoing vessels to Russia. The duration of the sanctions declared for the war in Ukraine has not been definitively decided. However, until the end of April, they were given a margin of discretion for vessels already contracted to supply Russia.

Helsinki Shipyard therefore has two options. It can apply for an export permit for the icebreaker by the end of April or count on the fact that in 2025 there will be no more sanctions.

“If an agreement to export a seagoing vessel to Russia has been made before February 26, the Ministry of Foreign Affairs may issue or be issuing an export permit. This presupposes that the export permit has been applied for before the first day of May, ”says the head of the Foreign Ministry’s export control unit Teemu Sepponen.

Sanctions According to Sepponen, even the repair work on rescuing the shipwrecked ship delivered from Russia to Russia requires an export permit from the Ministry of Foreign Affairs.

Helsinki Shipyard believes that the icebreaker project could still materialize.

“As a Finnish company, we always comply with all sanctions regulations, and current sanctions have no effect on our business. However, we are following the rapid development of the situation closely and are waiting for guidance from the state administration to evaluate our projects in the coming years, ”says the shipyard’s interim CEO. Simo Rastas.

No sanctions have been imposed on the yard and its owners.

Nornickelin Construction of the icebreaker will begin at the beginning of next year. Before that, the company must, of course, have the certainty that the icebreaker can be exported to Russia.

The biggest shareholder in Nornickel, who ordered the icebreaker, is a very influential Russian billionaire Vladimir Potanin, which according to the news agency Bloomberg, is the richest man in Russia. The estimated value of his assets is $ 25 billion, according to Bloomberg. No sanctions have been imposed on Potanin or Nornickel.

According to Rasta, less than two percent of the yard’s turnover came from Russia last year, but the share is growing due to the Nornickel icebreaker. Last year, the yard’s turnover was EUR 179 million.

Helsinki the shipyard has often been in the public eye in recent years.

In 2009, the future of the yard was at stake for the last time. It was then owned by the South Korean conglomerate STX, which wanted to leave the yard. There were hundreds of jobs in the game.

STX sold its 50% stake in the yard to Russian OSK. The shipyard was renamed Arctech Helsinki Shipyard.

OSK is a Russian state-owned shipyard that manufactures warships and submarines. From a commercial point of view, the deal made sense: Russia saved a shipyard that could build good icebreakers. They have already been manufactured in Helsinki for the Soviet Union.

Politically, the trade still raised questions. Why is the shipyard in the center of Helsinki being sold to a Russian manufacturer of warships and submarines?

The condition for the transaction was that no warships or submarines will be manufactured or serviced in Helsinki. OSK also wanted to acquire Aker Arctic, which specializes in the development of icebreaking technology. However, it was not sold, which was also a conscious solution: a shipyard was sold to Russia, but not the most important know-how in icebreaking technology.

Financial the difficulties escalated in 2014, when Russia invaded the Crimean peninsula of Ukraine. In the same year, the Helsinki shipyard became wholly owned by OSK. As a result of the attack, sanctions were imposed on OSK, which significantly hampered the yard’s payment transactions.

In 2019, the yard was acquired by an unknown Russian investment company, Algador Holdings. It is owned by the Russians Rišat Bagautdinov and Vladimir Kasyanenko. The yard is currently building two small cruise ships in Arctic waters. They have been ordered by the shipping company Swan Hellenic, owned by Bagautdinov and Kasyanenko, according to HS.

When Algador bought the shipyard in 2019, the advisor was the Finnish consulting company Corporate Advisor Group. Its CEO Heimo Hakamo has long handled a sanctioned Finnish-Russian billionaire Gennadi Timtšenkon things in Finland. Tymoshenko belongs to the EU and the United States, according to the president Vladimir Putin insiders.

Telakan complex ownership arrangements intertwined with Russia have long sparked debate over the importance of the company’s security policy.

“We are well aware of the foreign and security policy aspects of the yard [näkökohdista]”Says the mayor of Helsinki Juhana Vartiainen.

According to information received by Helsingin Sanomat from two known sources, the yard is alleged to be indirectly controlled by the Russian government through intermediaries. However, there is no conclusive evidence of a direct link with the Russian administration.

The key question for the yard’s future is what the City of Helsinki thinks about it. The shipyard is located on land owned by the City of Helsinki.

The shipyard has a lease agreement with the City of Helsinki until 2035. According to Vartiainen, the shipyard would like to extend the agreement.

Vartiainen says that he has been thinking for a long time why there is a Russian shipyard in the center of Helsinki. There may be decisions in the near future.

According to Vartiainen, the status of the shipyard and the fate of the lease will be considered in the coming days, as the City of Helsinki has already begun to investigate the measures it will take due to the changed security situation.

“Looking at the international political situation, it is difficult for me to see in the light of the current situation that the Russian-owned shipyard could continue to operate in its current location in the longer term.”