SPF announces new plans to resell Luhanskteplovoz

The State Property Fund plans to resell its 76% stake in Luhanskteplovoz (UX: LTPL UK) in March 2010, the SPF’s official newspaper yesterday said. Neither the date nor the starting price was announced. The SPF sold the stake to Bryansk Heavy Machinery, part of Russia’s Transmashholding, in March 2007, but that auction was ruled illegal by the Economic Court of Luhansk in September 2009 and shares were returned to the SPF in early November. Yegor Samusenko: This publication was a preliminary schedule for privatization. According to privatization procedures, an official announcement for the auction still must be made and be done 75 days beforehand, which already makes it impossible to sell Luhanskteplovoz earlier than late April. Currently, the SPF is in process of valuating the stake; an SPF representative declined to say when a privatization announcement can be expected, when we asked. Luhanskteplovoz quotations on the UX imply a price of UAH 500 mln for the state 76% stake (vs. UAH 292.5 mln in the 2007 privatization). As we continue seeing Transmashholding as the only potential buyer, we think the stake will be sold at the auction’s starting price. We advise holding Luhanskteplovoz shares until the SPF announces the starting price of the auction.