Another challenge to Zhevagos control of Czech casting producer

E.ON Energie filed an appeal against the restructuring plan for Czech steel casting producer CKD Kutna Hora, which effectively gave control over the plant to Konstantin Zhevago, Kommersant reported today. This is the second entity to question the validity of the restructuring plan, after Russian Rail Group, Zhevago’s main competitor to restructure the plant. CKD Kutna Hora, a producer of steel casting for the railway machinery sector, is an important part of Zhevago’s wagon production cycle and key supplier of spare parts to his Stakhaniv Wagon (SVGZ UK). The Czech enterprise can supply up to 60% of Stakhaniv’s casting needs.

Alexander Paraschiy: While we do not see any direct implications from this new challenge to Zhevago’s deal, this nevertheless imposes additional risk that Zhevago will lose control over the Czech company. In turn, this questions the long-term stability of raw material supplies for Stakhaniv Wagon, whose dependence on CKD is growing on the background of a rising deficit for wagon casting in the CIS.