RZD to announce tender for First Cargo Co privatization Sept 6

CHEREPOVETS, September 5 (Itar-Tass) — The Russian Railways Company will announce a tender for privatization of the First Cargo Company on September 6, RZD President Vladimir Yakunin told reporters on Monday.

Last week the RZD reconsidered the company’s valuation.

“The valuation increased insignificantly, somewhere within 10 percent (from the initial cost),” he said. “This is the largest privatization in the history of Russia and it will be right.”

In general, the RZD plans to get 130 billion roubles from the sale of the state property. Despite “the low market” the interest in freight rail transport remains very high, which makes it possible to hope for good revenues, Yakunin said.

Earlier, the government finalized the sale of 75 percent minus two shares in the First Cargo Company in open auction.

“The sale of a controlling stake in the First Cargo Company will become a key element in the reform of the freight rail system of Russia’s railways,” Yakunin said. “As a result of this step on the market the largest private player in the cargo sector will emerge, while the RZD will get significant funds for financing the investment program.”

The auction’s terms allow to hope that a strategic investor interested not only in getting commercial profits, but in developing Russia’s railway transport system will appear in the railway sector, Yakunin said.

The First Cargo Company is Russia’s largest rail freight operator. Its main shareholder and owner is the RZD. The First Cargo Company was set up in July 2007. It owns over 200,000 different rolling stock units.

In 2010, the First Cargo Company carried 302.3 million tonnes of cargoes. Last year, under the international accounting standards its net profit increased by 4.5 times to 19.9 billion roubles. It reported a 44.5-percent increase in revenues to 103.5 billion roubles.


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