Kyiv City Economic Court approves Luhanskteplovoz sale to Transmashholding

The Kyiv City Economic Court approved a voluntary settlement between the State Property Fund and Bryansk Heavy Machinery (part of Transmashholding), which stipulates that both parties have no claims against each other. As a result, Bryansk Machinery holds 76% stake in Luhanskteplovoz (UX: LTPL UK). The SPF sold the stake to Bryansk Heavy Machinery, part of Russia’s Transmashholding, in March 2007 for USD 58 mln, but that auction was ruled illegal by the Luhansk Economic Court in September 2009 and shares were returned to the SPF in November. In June 2010, the SPF completed another auction which has been won by Bryansk Heavy Machinery again, this time for USD 51 mln. In September 2010, the Kyiv City Economic Court ruled that the privatization auction was illegitimate in response to another bidder’s lawsuit. Later in December, the Kyiv City Appellate Court, confirmed Transmashholding as the legitimate owner of a 76% stake in Luhanskteplovoz; this followed statements by Prime Minister Mykola Azarov that both parties settled their dispute. Yegor Samusenko: This latest court decision, hopefully, will end the four-year saga of Luhanskteplovoz’ privatization, one of Ukraine’s two storied reprivatization tales in the last decade. We note, however, that the return of control to Transmashholding has already been priced in by the market, in our view, since the company started placing orders at the plant as a normal business practice in late 2010.