OREANDA-NEWS. November 29, 2007. On November 27, Rivno regional unit of the State Property Fund of Ukraine sold a state-owned stake (38%) in Rovnoselmash OJSC for UAH 22.3 mn to Morgan-Furniture LLC (Ivano-Frankovsk), controlled by Franklin Duncan McMahon (a US citizen, controls 53.96% of shares in Rovnoselmash OJSC). The key specialization of Morgan-Furniture LLC is cushioned furniture manufacture. The starting price for the block of shares was UAH 22.311 mn. According to the auction terms and conditions the buyer is to ensure in a year after the stake purchase the sales at the level of not less than UAH 8.5 mn; in the 2nd year – not less than UAH 10 mn; in the 3rd year – not less than UAH 17.5 mn; in the 4th – not less than UAH 20 mn; and in the 5th year – not less than UAH 22 mn.

Franklin Duncan McMahon appeared among the shareholders of this Rivno-based company in spring 2006 after purchasing a 40.75% interest in the OJSC from Katredes (Canada), owned by Sergei Kharovskiy, former head of internal security department at Internal Affairs Ministry of Ukraine. By last summer by purchasing shares in the secondary market the American businessman concentrated a controlling interest in the company (53.96%).

It is interesting that before the Rivno-based company acquisition the core business of Mr McMahon was the furniture production. The family of McMahon owns the Estonian-based furniture factory – Fleming AS, which annual turnover amounts to about $15 mn. In view of the fact that soon after acquisition of the controlling interest in Rovnoselmash this American citizen registered on the territory of the latter a new company – Fleming-Ukraine LLC, one may assume that in the nearest future Rovnoselmash will stop its core activities and several furniture factories specialized in cushioned furniture production will be constructed on its territory. And this territory is not so small – 53 hectares.

Rovnoselmash OJSC is an agricultural machinery company specialized in production of small agricultural machinery – tractor trailers and motor feeders. The company ended 2006 with loss of UAH 1.34 mn increasing its net income twofold or by UAH 3.647 mn to UAH 7.17 mn as against 2005.