State Railways Announces Switch to Leasing of Carriages.

The new CEO of Ukrzaliznytsya (UZ), the state railways administration, said UZ would stop buying carriages and switch to leasing, as it couldn’t afford to continue increasing its debts. He said UZ was reconsidering its recent agreement to buy 800 carriages from Kryukivka Wagon Building (KVBZ), but Kryukivka could still supply the carriages if it agreed to new leasing terms. Olha Pankiv: The change in UZ’s plans could adversely influence cash flows for carriage producers, particularly KVBZ. Since UZ’s new CEO is a former manager for System Capital Management, we believe it is more likely that Mariupol Heavy Machinery (MZVM: BUY) and Azovzahalmash (AZGM: BUY) will supply the carriages.