OREANDA-NEWS. March 03, 2010. Mostotrest has raised its stake in Mostostroy-11 to 25%.  With reference to official sources that Mostotrest acquired slightly over 1% in Mostostroy-11, a major bridge-building company in Western Siberia. Following the transaction, Mostotrest has brought its total holding in Mostostroy-11 to a blocking interest. In mid-February, Mostotrest took 24% in Mostostroy-11 and according to official spokespersons, the transaction involved major shareholders.

In our report of February 18, we forecast that Mostotrest was to increase its stake in Mostostroy-11. Since Mostotrest intends to publish consolidated IFRS financials as early as 2010, the company could be potentially interested in acquiring a controlling interest in Mostostroy-11 to consolidate its financial results in reporting. However, we do not consider this as a baseline scenario, as 53.5% in the company is directly controlled by management.

We regard the news that Mostotrest has raised its holding in Mostostroy-11 as positive and showing that consolidation of the road-building sector around Mostotrest is gaining momentum. Our target price for Mostotrest is USD 1,435, with a 74% upside.