OREANDA-NEWS. November 20, 2009. The State Property Fund issued an order on November 18 that puts a Luhanskteplovoz (LTPL) reprivatization auction on the calendar for December, local news agencies reported yesterday. The SPF said earlier this week it will hold a competition to select an appraiser for the Luhanskteplovoz stake on December 2. The SPF sold the stake to Bryansk Heavy Machinery, part of Russia's Transmashholding, in March 2007, but that auction was ruled illegal by the Economic Court of Luhansk this September and shares were returned to the SPF in early November. In other news, yesterday Luhanskteplovoz Chairman Viktor Bykadorov said the company planned to make a new prototype locomotive next year for use by Mongolian Railways; the new model is designed for use at high altitudes and climatic conditions specific to Mongolia.

Concorde Capital: We view the possible resale of Luhanskteplovoz unfavorable for minorities, as it implies an outcome where the plant could lose its main customer, Russian Railways (which partly owns current controlling shareholder Transmashholding) in the event of reprivatization. However, we still see reprivatization as unlikely, and believe Transmashholding will appeal the Luhansk court decision.