October 11, 2016 / 1:02 PM / a year ago

Gunvor owner cuts stake as staff buy into growth strategy

LONDON (Reuters) - The co-founder of Gunvor, Torbjorn Tornqvist, is diluting his stake in the company to allow employees to own more than a third of the fast-growing trading house by year-end to help to retain and recruit talent as it pursues its global expansion strategy.

CEO of Gunvor Group, Torbjorn Tornqvist speaks during the Oil & Money conference in London October 1, 2013. REUTERS/Luke MacGregor

Gunvor has been diversifying away from Russia, where it was created at the turn of the millennium by Swedish citizen Tornqvist and Russian businessman Gennady Timchenko, and changing its ownership structure to resemble other global trading houses such as Vitol and Trafigura.

Tornqvist told the Reuters Commodities Summit in London that he would decrease his stake to 62 percent from 70 percent by year-end and possibly even further in the future.

“It was well received and the capital offered to the senior staff was actually oversubscribed, which was very good because it means that senior people clearly believe in this company’s direction,” he said.

Tornqvist used to own 100 percent voting rights in Gunvor after buying out Timchenko’s 50 percent in 2014, a day before the United States placed sanctions on the Russian businessman and other allies of President Vladimir Putin after Russia’s annexation of Crimea from Ukraine.

Several of Gunvor’s counterparties were spooked by the sanctions on Timchenko but the initial brief period of turmoil for the business settled when U.S. officials said they wanted the company to continue normal trading operations.

Since 2014 Gunvor has said it would expand globally and reduce its exposure to Russia.

Tornqvist sold several key Russian loading terminals, paid Timchenko about $1 billion for his stake and embarked on a global expansion with the acquisition of refineries and terminals while beefing up offices in Europe, South America and Asia.

It is now opening an office in Houston, having secured $500 million in financing and poached traders from the likes of Koch.

“Many people thought we would not be able to achieve globally what we achieved in Russia,” Tornqvist said, adding that he didn’t want Gunvor to be seen as a “one-man company”.

About 200 employees of Gunvor are already shareholders in the company.

“I think it encourages, it motivates and it also makes people aware of the well being of the company,” he said of the increasing employee ownership.

“It’s not unreasonable that I will further dilute my shareholding.”

Gunvor traded 180 million tonnes of energy and commodities last year and generated $64 billion (£52 billion) in revenue, making it one of the world’s largest independent energy traders behind Vitol, Trafigura and Glencore (GLEN.L).

Editing by David Goodman; Reuters Summits on Twitter @Reuters_Summits

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