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US Russia Investment Fund quits Lomonosov

The US Russia Investment Fund (TUSRIF), managed by Delta Capital Management, has sold its stake in the troublesome Lomonosov Porcelain Plant to an individual shareholder after four years. The US private equity fund Kohlberg Kravis Roberts (KKR) has also reduced its holding in the Saint Petersburg-based company but remains the second largest shareholder. Galina Tsvetkova, wife of the president of the Nikoil Financial Corporation, became a shareholder in the company early this year and paid an undisclosed amount to take control of the company.

Lomonosov Porcelain was founded in the 18th century and now exports its products, such as decorated tea and coffee services, to a global market. TUSRIF and KKR bought their stakes in the Lomonosov Porcelain Plant in 1998 from a number of offshore-registered brokerages. The sale was challenged when the method used by the brokerages to acquire the shares from employees was questioned.

This was only the first problem overcome by the investors who also faced a factory lockout and attempted government re-nationalisation of the company when the 1993 privatisation was challenged. Delta Capital bought in new management including industry experts to help develop the business.

Evelina Baxter, of Delta Capital, said: “Since the fund became a shareholder, Delta Capital has worked closely with its partners in assisting the management in the development of the company, thus improving shareholder value and ensuring a return on our initial investment.”

It has been reported that Nikoil plans to merge Lomonosov with bankrupt French porcelain maker Deshoulieres.