Globaltrans to double share capital via SPO

Globaltrans (GLTR LN), the largest private freight rail operator in Russia, announced late last week that it planned to convene its shareholders for an EGM on November 23 to consider doubling the company’s share capital to USD 23.4 mln via the issuance of additional shares. According to Russia’s Vedomosti, citing a Globaltrans representative, proceeds from the share issue are to be used to purchase new rolling stock. Yegor Samusenko: We view this news as positive for Ukrainian railcar manufacturers. As of November 9, Globaltrans was trading at a MCap of USD 1,084 mln. If the SPO is successful, the sum would be enough to buy ~28 ths new gondola railcars at current market prices, twice more than our estimate of 2010E output of Ukrainian manufacturers. We think this equity injection can boost CIS demand for new railcars in the mid-term, as financing restrictions are one of the reasons behind the 3x yoy drop in 9M09 wagon output in the CIS. In 8M09, Ukrainian railcar producers accounted for 42% of total CIS output.