Azovmash shareholder gets permission for its plant consolidation

The Antimonopoly Committee of Ukraine announced yesterday it has given permission to Mariupol Investment Group (MIG) to buy over a 50% stake in Poltavakhimmash (wagon and cisterns producer). MIG holds 66% of Ukrainian Industrial & Transport Company, which is the owner of a 50% minus 1 share in Azovmash. Azovmash is a holding company for Mariupol Heavy Machinery (MZVM: BUY) and Azovzahalmash (AZGM: BUY). Inna Perepelytsya: We perceive this announcement as Alexander Savchuk’s (owner of MIG and president of Azovmash) first step toward creation of a railcar machinery holding. We expect Savchuk to consolidate its wagon building assets (Azovzahalmash, Mariupol Heavy Machinery, Poltavkhimmash, Armavir plant (Russia) under MIG umbrella by 2009 yearend. The consolidation should bring about cost optimization and better marketing policy in Russia (up to 90% of wagons of the group is sold at the Russian market).