Ukrzaliznytsya Plans USD 400 mln Loan for Wagon Purchases

Mykola Rudkovsky, Minister of Transportation and Communications, said yesterday that monopoly railway operator Ukrzaliznytsya plans to take out state credit of USD 400 mln to purchase new railcars through leasing agreements. According to Rudkovsky, over the next 10 years, Ukrzaliznytsya will acquire about 4 ths new passenger cars at a cost of USD 1 mln each and he estimates a total of USD 2 bln will be spent on new freight car purchases. Inna Perepelytsya: Ukrainian wagon makers Kryukiv Wagon (KVBZ), Stakhaniv Wagon (SVGZ: BUY), Mariupol Heavy Machinery (MZVM: BUY), and Azovzahalmash (AZGM: HOLD) stand to benefit if Ukrzaliznytsya follows through with its plans to finance the rejuvenation of its outdated railcar fleet through long-term debt. New orders from the state monopoly would increase domestic sales; wagon producers are currently oriented toward the Russian-market. Kryukiv Wagon could gain the most from this news as it is produces freight cars and is the only producer of passenger cars in Ukraine.