Luhanskteplovoz CEO Hopes for Privatization.

The company’s (LTPL: HOLD) CEO said yesterday that privatization was the only way the company could make use of its underutilized capacity, currently at just 17%, as potential orders from the state railway would not be enough. He said Transmashholding (Russia), Siemens (Germany), AvtoKrAZ (Ukraine) and Kolej Baltycka (Poland) had expressed interest and that Alstom (France) and Bombardier (Canada) could also participate in the auction of a 76% stake in LTP planned for October 3. He also said the company plans to increase output by 10% in 2006 to $95.6m, and reported that one of the company’s private shareholders, whose identity he didn’t know, had accumulated a 10% stake. Olha Pankiv: The large shareholder is most likely looking to re-sell the shares at a higher price after privatization. However, the State Property Fund’s conditions for the tender clearly favour Transmashholding and make it possible that the fund could eliminate most other competitors before the auction. If that happens, the sale price might not be much higher than the starting price of $58m.