TKS’s Subsidiary to Place a 10-15% Stake on PFTS

At their sitting on April 12, TKS Management’s (37W1 GR: BUY) supervisory board decided to conduct a private placement of a 10-15% stake in equity of TKS’s subsidiary specializing in concrete production. The placement is to be held on PFTS in 2Q08, the company said. According to Oksana Khomyk, TKS’s Business Development Director, the company expects to have seven concrete plants at the time of placement, up from three now. The holding is planning to use the proceeds to increase the number of its concrete plants to 20 in 2009. In 2008, the company projects EBITDA only from concrete production at USD 20 mln. Andriy Gostik: Demand for concrete posted triple-digit growth in 2006-07 (100-150%), according to industry players. In our view, the capitalization of TKS’s concrete production should positively reflect on the company’s stock price, as currently the market values TKS primarily based on its project portfolio, while the value of its construction assets remain overlooked. We maintain our positive view on the stock.