OREANDA-NEWS. May 31, 2010. Bogdan Motors (UX: LUAZ UK) announced on Friday that it has drafted an agreement on the joint production of trolleybuses with Czech Republic’s Cegelec in Ostrava (Czech Republic) for export to EU countries, Interfax reported. A Bogdan representative quoted by Interfax said the documents would be presented by mid-June, at which time more details would be disclosed. The Bogdan rep said that the Ukrainians would provide the body assembly to the venture.

Concorde Capital: Given the announced plans to produce 50-70 units per year starting from 2011, the project may add up to USD 8-12 mln in Bogdan sales (3-5% of 2011E sales). Though potential revenue growth looks marginal, we note that this is the first attempt of Ukrainian automotive manufacturers to open the doors to Eastern European public transport market. If the project succeeds, Bogdan will likely cooperate in other segments like manufacturing buses for Eastern Europe, finding utilization for its excess capacities.