‘Lugansk diesel locomotive’ plant re-sold

The State Property Fund of Ukraine has a new owner for a 76% shareholding in the Lugansk diesel locomotive plant, the country’s biggest manufacturer of electric trains, cargo diesel locomotives, and trailer cars. The purchaser is Russia’s Bryansk machine-shop part of the Transport machine-building holding company (75% owned by Iskander Makhmudov and Andrey Bokarev). In the competition, organised by the State Fund, two participants took part: Bryansk Plant and Scientific Production Association’s Frunze, part of the Energetic Standard group controlled by Russian businessman Konstantin Grigorishin.

The winner bid some Hr 410 m (US$51.25 m), just a little more than the initial opening auction price of Hr400 m (US$50 m). As a result Ukrainian experts and politicians say that the price, which the winner of the competition paid, is considered to be low. Aleksandr Parashiy of investment analysts BG Capital said that Grigorishin’s company played the role of a technical candidate. “Lugansk diesel locomotive plant’ isn’t a core asset for the businessman’s group. Scientific Production Association’s failure to raise the price during the auction confirmed the lack of interest in the plant,” said Parashiy.

Aleksandr Bondar, former head of the State Property Fund of Ukraine added that during normal competition the price for the controlling package of shares would have been expected to raise to Hr800 m (US$100 m).

This same shareholding was sold once before, on the 23d of March 2007, to the Bryansk Machine-shop. At that time the winning bid paid was US$57.9 m. But in October 2009 the results were cancelled and this plant was taken into the State Property Fund of Ukraine.