Motor Sich & Volga-Dniper Agree To Restart Ruslan Program

After more than two years of negotiations, Motor Sich (MSICH: BUY) and Russia’s Volga-Dniper announced yesterday that they had agreed to form a joint venture to restart production of the AN-124 Ruslan aircraft, the world’s largest cargo plane. According to the terms of the agreement Volga-Dniper, a global leader in oversized cargo transportation, will control 59% of the JV, with the remaining 41% going to MSICH. Other companies including the Antonov Corporation, the Progress Design Bureau and Russia’s Aviastar will be invited to join the JV later on.  According to Volga-Dniper representatives it will take nearly USD 500 mln over the first five years to restart serial production. USD 100 mln will be contributed by Volga-Dniper and MSICH, with the remaining sum to come from the Ukraine and Russian governments and private investors. The An-124 can carry up to 150 mt of cargo over 12,000 km. MSICH recently agreed to form a corporation with the Progress design  bureau. Additionally we continue to get messages from the management about what they have termed an IPO. Volga-Dniper, has also announced plans to hold an IPO for a 25% stake in 2007.