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MOSCOW, August 1 (Itar-Tass) —— Six companies has submitted their bids for shares in First Cargo Company to the Federal Antimonopoly Service (FAS).
The bids were submitted by Skovorodino LLC industrial and transport company and NefteTransServis closed joint stock company for 10 percent minus one voting share; by Sevtechnotrans LLC and New Transportation Company open joint stock company for 100 percent of shares; by Independent Transport Company and Transoil LLC for 75 percent minus 2 voting shares.
Earlier on Monday, August 1, the Russian government has approved the sale of 75 percent minus 2 shares of First Cargo Company.
The shares will be auctioned. According to government Resolution No. 1315-r of July 28, 2011, the bidders can be legal entities registered in Russia but not state-owned corporations and having a stable financial position and experience of operating the railway rolling stock.
“The final minimum selling price of a share will be determined on the basis of an independent valuator’s statement not later than 30 days before the auction,” Russian Railways Company told Itar-Tass.
Russian Railways Company CEO Vladimir Yakunin said, “The sale of the controlling interest in First Cargo Company will be a key element of reform in the cargo segment of Russian railways.”
“As a result, the biggest private player in the cargo segment will appear in Russia, and Russian Railways will get considerable funds for its investment programme,” he said.
He believes that the terms of the auction give ones hope that the sector will get a strategic investor “which is interested not only to receive a commercial benefits but also to develop freight railway transportation in Russia”.
Russian Railways said the sale of First Cargo Company shares was scheduled to take place before the end of this year, and the potential buyers would have to obtain the Federal Antimonopoly Service’s approval for their participation in the auction.
Russian Railways said earlier that it could make an initial public offering (IPO) of its 100 percent-owned subsidiary First Cargo Company in London.
The Russian government has not decided yet whether to sell a stake in First Cargo Company through the IPO or directly to an investor in Russia, Yakunin said back then.
The government could offer up to 25 percent in First Cargo Company for either of those deals, Yakunin said, adding that the size of the stake had been being discussed and could amount to 10 percent, 15 percent, or 20 percent.
Yakunin said that the company is not planning to sell a 100 percent stake in First Cargo. “To put it mildly, that is not true. Any participant acquiring the company wants Russian Railways to also remain in it,” Yakunin said. A source at Russian Railways said earlier that the company might sell a 100 percent stake.
In January, Transportation Minister Igor Levitin proposed selling 51.75 percent in First Cargo Company sometime in January–June. Yakunin said at the time that Russian Railways could sell the stake for 5.0 billion–6.5 billion roubles.
In late December 2010, Deputy Prime Minister Alexander Zhukov said that the government had planned to decide in January–March how and when First Cargo Company would be sold.
First Cargo Company, established in July 2007, is Russia’s largest operator of cargo transportation by rail. The main founder and owner of First Cargo Company ordinary shares (100 percent – 1 share) is Russian Railways. The non-commercial organisation Baminvest as a co-founder owns one ordinary share in the company.
First Cargo Company was created in July 2007 and independently began to manage the carriage stock in November of the same year. Currently it owns 235 172 units of rolling stock of various types (66,763 tanks, 125,874 gondolas, 7,016 platforms, 16,545 box carriages and about 707 other carriages). The company’s share of all rolling stock in the Russian Federation is 21percent.
The company seeks to provide the best quality of transportation and logistics services on the market, to be the leader, and to make rail freight transport affordable and attractive for the client.
The company’s net profit in 2010 increased to 19.9 billion roubles from about 4.4 billion roubles in 2009, as calculated under International Financial Reporting Standards. The company attributed the significant growth to an increase in shipments and the improved efficiency of the company’s operations, among other reasons. The company’s revenue rose 44.5 percent on the year to 103.5 billion roubles in 2010.