AvtoKrAZ (KRAZ: Buy) Obtains Controlling Stake In Stakhaniv Carriage-Building Plant

This has increased the number of the companies in AvtoKraz’s holdings to eight. Last year, Stakhaniv Carriage-Building posted net revenues of USD 45.7mn and a net loss of USD 2.5mn.Concorde Capital:On a consolidated basis, AvtoKrAZ’s revenues would have been 64% higher in 2004 with the acquired stake in Stakhaniv. In our opinion, Stakhaniv?s negative margins were due to manipulation by the previous owners. The railcar business is a profitable activity and we expect that KrAZ’s aggregated margins will not be hurt. The acquisition is part of AvtoKrAZ’s attempts to diversify into the railroad machine-building segment. Previously the company participated in a tender for the purchase of a 76% stake in Luganskteplovoz (LPTL). AvtoKraz was the only bidder and it was rejected by the State Property Fund. The case is pending review.