Court To Hear Case Challenging LTPL Sale On June 26

On June 26 the Kyiv Economic Court will open hearings on a lawsuit brought forward by Ukraine’s Procecutor General Office (PGO) challenging the State Property Fund’s (SPF) sale of a 76% stake in Luhanskteplovoz (LTPL: BUY) to Russia’s Bryansk Machine Plant. The Bryansk Machine Plant is controlled by Russia’s Transmashholding. The PGO filed the suit following a request by Viktor Yushchenko to examine the privatization. Inna Perepelytsya: We believe it is highly unlikely Luhanskteplovoz will be reprivatizated. Transmashholding is the best suitor for Luhanskteplovoz in terms of being able to bring the company Russian orders, especially considering that Russian Railways recently announced it was buying a stake in the former. Transmashholding will also be able to boost Luhanskteplovoz’s research and development as it has a great deal of experience in locomotive production and design. We maintain our BUY recommendation.