Ukrzaliznytsya To Buy 22 Electric Trains From Luganskteplovoz For USD 137 mln In 2006.

The purchase means necessary replacements for Ukrzaliznytsya, about 80% of the company’s equipment is worn out. Earlier Ukrzaliznytsya announced plans to invest USD 588 mln in purchases and repairs for its trains and carriages in 2006. The other large contract the company announced involved the purchase of 100 passenger carriages from Kryukivsky Carriage in 2006. Concorde Capital: The Ukrzaliznytsya order alone will triple Luganskteplovoz’ (LTPL) sales in 2006. The company posted USD 45.7 mln in net revenues for 9M05. Even with the UZ order factored in, Luganskteplovoz would only be working at 30% capacity – making the Russian market appealing for them. Yesterday, the chairman of the Russian railway equipment producer Transmashholding confirmed the company’s intention to buy LTPL if it is privatized. Privatization seems close, as the head of State Property Fund Valentina Semenyuk announced yesterday that she hopes to sell a 76% stake in Luganskteplovoz for USD 490.2 mln. The amount looks quite impressive: using estimated 2006 financials Semenuk’s claim implies x3 P/S! It looks like all the parties above have had discussed the matter, and have decided, “if you scatch my back, I’ll scratch yours.”