OREANDA-NEWS. October 21, 2010. The Board of Directors of Russian Railways has approved the results of a tender for the sale of stake in ELTEZA, reported the press-centre of RZD.

The tender was held in accordance with a Russian Government decision to approve the sale of up to 25% plus 1 share in ELTEZA at a price of not less than 1,601.6 roubles per share.

Consultant to the tender was RCF (Russia) BV, a division of the Rothschild investment bank.

Reviewed were applications from Bombardier Transportation and Siemens. Participants were asked to consider the possibility of acquiring up to 50% minus 2 shares of ELTEZA and submit proposals to develop the company in cooperation with Russian Railways as a major consumer of the company’s products.

The Commission decided the best financial and technical offer came from the Bombardier Transportation subsidiary BT Signalling BV, which offered to acquire 50% minus 2 shares in ELTEZA for 1,991.8 billion roubles. In addition, the company plans to transfer technology to produce a full line of devices using microprocessors and launch ELTEZA products on new markets.

According to the conditions of the tender, the winner and Russian Railways will sign a share purchase agreement and complete the deal before the end of 2010.

The Board also decided to propose to the Russian government the sale of an extra 25% minus 3 shares within the framework of the tender.

The competition to sell the stake in ELTEZA is the first successful example of a Russian Railways’ subsidiary being privatised. ELTEZA is a strategic supplier with innovative solutions for upgrading production.
 
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The Open Joint Stock Company ELTEZA was established in April 2005 and is a 100% subsidiary of Russian Railways. The main focus of ELTEZA is the design, development and manufacture of automation systems, telemetry and communications for operational requirements in the rail sector.

ELTEZA’s plants produce about 6,000 different products, some 94% of which is purchased by Russian Railways.

ELTEZA includes eight electrical plants: the Armavir, Gatchina, Yeletsky, Kamyshlovsky, Losinoostrovsky and St. Petersburg Electrotechnical Plants, the Volgograd Casting and Mechanical Plant and the St. Petersburg Electrical Engineering Plant.