15 June 2010

Russians Invest in Ukraine

It's no suprise that Russian money is available to buy assets in Ukraine.
Foreign investors from the west will always tread very carefully when considering Ukraine. But not Russians. They have a head start by speaking the same language, same culture and the same shared perceived desire to "Do things quickly".

A conversation I had today with a local business man even raised my eyebrows, and he asked me not to disclose any details to the market yet as the investors were Russians.

Some people will claim the usual "The Russians want to buy up Ukraine". Well this is what happens in a free market economy. But I do remember the British government getting twitchy when Gasprom expressed an interest to buy British Gas.

One example from today is the purchase of 76% in Ukraine's largest locomotive producer - Luhanskteplovoz by Russia's Transmash holding.

Russia's Transmashholding buys Ukrainian locomotive maker
Today at 15:19 | Reuters Russian train equipment producer Transmashholding (TMH) on Tuesday, June 15, bought a 76 percent stake in Ukraine's largest locomotive producer Luhanskteplovoz for $52 million, officials said after a privatisation auction.

"(TMH unit) Bryansk Machinery Plant has won (the auction)," Ihor Myronyuk, deputy head of the state property fund said.

TMH, which was up against a Ukrainian bidder, had a previous deal to buy Luhanskteplovoz for $58 million from the government of Viktor Yanukovich in 2007 cancelled by the cabinet of his successor Yulia Tymoshenko, who said the deal was illegal.

Yanukovych, who enjoys strong Russian backing, was elected president in January, beating Tymoshenko in a tight race.

TMH is the main manufacturer of rolling stock in Russia, Europe's largest railway market, with over 85,000 kilometres (52,820 miles) of track, carrying 1.3 billion passengers and 1.3 billion tonnes of freight a year. French heavy engineering group Alstom signed a deal to buy 25 percent of TMH in March.

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