Antimonopoly Committee Approves Reshuffling of Azovmash Shareholder

Ukraine’s Antimonopoly Committee granted permission to the Mariupol Investment Group to acquire more than a 50% stake in UPTK, the main private shareholder of the Azovmash Holding, which has operating control over Azovzahalmash (AZGM: BUY) and Mariupol Heavy Machinery (MZVM: BUY). Inna Perepelytsya: We believe that one of the three groups, each holding ~33% of UPTK, is consolidating its stake through Mariupol Investment Group, a vehicle which was apparently created for this purpose in November 2006. We view this news as neutral for the two traded Azovmash stocks since the shareholder is likely to continue following UPTK’s current management policies (see our July 17 report). We reiterate our two BUY recommendations on AZGM and MZVM.