SPF Adds Luganskteplovoz To 2006 Privatization List.

The State Property Fund has added Luganskteplovoz, Sumykhimprom, Ukragromashinvest and Azot Severodonetsk to a list of additional companies to be privatized in 2006, which has been submitted to the government. According to the SPF privatizing these companies could bring up to USD 1.15 bln to the budget.

Major companies to be put up for privatization:

                                                      % to be sold             Expected                Proceeds USD mln

Sumykhimprom                                      100                    990.1

Luganskteplovoz                                      76                     98.0

Rosava                                                 74,62                    10.2

Ukragromashinvest leasing company      50,08                     7.8

Azot Severodonetsk                                100                       n/a

Concorde Capital: The State Property Fund has significantly lowered the amount it expects to receive from the privatization of Luganskteplovoz –USD 98 mln from USD 490 mln, SPF head Valentina Semenyuk announced two weeks ago. We consider the newly announced number as more realistic. While the former value implied P/S of three, the latter lowers it to 0.7. Earlier Ukrzaliznytsya announced its intention to buy 22 electric trains for USD 137 mln in 2006, which would almost triple the company’s sales this year.