Transmashholding buys 76% of Luhanskteplovoz for UAH 410 mln

Today, the State Property Fund (SPF) auctioned its 76% stake in Luhanskteplovoz (UX: LTPL UK). Two companies were allowed to participate, Bryansk Machinery (affiliated with Russian Transmashholding) and Sumy Frunze (UX: SMASH UK) (Konstantin Grigorishyn’s group). The SPF declined to allow Cyprus-registered Mantara Holding (reportedly affiliated with Privat group) to participate in the auction due to a non-submission of two required documents. Bryansk Machinery bought the stake for UAH 410 mln (UAH 2.46 per share), a tiny 2.5% premium to the starting price. Yegor Samusenko: We believe that Luhanshteplovoz minority shareholders will benefit from Transhmasholding winning the auction, as the latter is the only company able to achieve high load of currently idle Luhanshteplovoz`s capacities. However, we believe that expectation of Transhmasholding winning the auction is already priced in by the market (yesterday’s closing price of UAH 4.79 per share is 2x higher than the selling price). Moreover, given that Mantara Holding was not allowed to bid, we see a threat of harsh legal battles initiated by Mantara Holding after the auction.