OREANDA-NEWS. June 29, 2010. OJSC Russian Railways approved the result of the closed tender for the right to purchase a 50% minus 2 shares’ stake in OJSC United Electrical Engineering Plants ("Elteza"). RCF Russia BV, the Rothschild Group investment banking subsidiary in Russia, acted as advisor, reported the press-centre of RZD.

The tender was conducted in fulfilment of the decision of the Russian Government of October 5th, 2009, which approved the sale of a 25% plus one share stake in OJSC Elteza at a minimum valuation of RR 1,601.6 per share.

Five companies comprising the global leaders in signalling equipment were invited to tender, namely, Alstom, Thales, Bombardier Transportation, Finmeccanica and Siemens. The bidders were offered the possibility to acquire up to a 50% minus 2 shares in OJSC Elteza and to submit their proposals in relation to the development of the company in cooperation with OJSC Russian Railways as its main customer.

Bids from Bombardier Transportation and Siemens were submitted. The tender commission judged the proposal of Bombardier Transportation as the best one, both financially and technically. Specifically, the winning bid plans for the transfer of technology in relation to the manufacturing of a complete range of microprocessor devices as well as to introduce Elteza products to new markets.

According to the terms of the tender, the winner and OJSC Russian Railways (subject to approval by the Board of Directors of OJSC Russian Railways and by the Russian Government) should enter into a share purchase agreement to complete the deal by the end of 2010.

This tender process in relation to OJSC Elteza is the first successful example of the privatisation of a Russian Railways’ subsidiary and strategic supplier which represents an innovative solution towards modernising the production of key components.
 
*****
 
OJSC Elteza, a fully owned subsidiary of OJSC RZhD, was established in April 2005. The company focuses on the design, development and production of rail signalling equipment and automatic and remote train control systems. Elteza plants produce approximately six-thousand products. About 94% of total production is sold to OJSC RZhD.

OJSC Elteza comprises eight industrial plants including electrical engineering factories in Armavir, Gatchina, Yelets, Kamyshlovsky, Losinoostrovsky and St Petersburg, a casting & mechanical plant in Volgograd and a machine-building plant in St Petersburg as well.

Elteza’s authorised capital amounts to RR 2,368,936,000 and comprises 2,368,936,000 ordinary shares with a face value of RR 1,000.