OREANDA-NEWS. On September 19, 2008 The European Bank for Reconstruction and Development has acquired a stake of 3.2 percent in Globaltrans Investment plc, one of Russia’s leading private rail freight operators, as part of the company’s Initial Public Offering on the London Stock Exchange. The acquisition was disclosed after a Memorandum of Understanding covering cooperation between the EBRD and Globaltrans was signed this month, reported the press-centre of EBRD.

The EBRD last May obtained an allocation of 10 percent of Global Depositary Receipts, equivalent to 3,740,000 shares in the Company. This represents an investment of \\$ USD 49.55 million via the first ever IPO by a private rail operator active on Russia’s huge freight market. Globaltrans GDRs are traded on the LSE’s Main Market.

The Bank welcomes Globaltrans’ commitment to strengthen its corporate governance, including by having independent directors on its board and adopting a policy on the protection of minority shareholders’ rights, said Thomas Maier, EBRD Business Group Director for Transport. The EBRD will support the company’s efforts on this front, as well as over other planned innovations, Mr. Maier added.

The EBRD and Globaltrans signed a Memordandum of Understanding covering cooperation in these areas on September 16th.

This investment supports the key goal of widening private sector participation in rail operations as part of Russia’s ongoing railway reform and the proceeds will be used to fund the purchase of urgently needed new rolling stock, including open top wagons and cement hoppers. These will be built in Russia and Ukraine.

Globaltrans’ Russian subsidiary, New Forwarding Company, operates one of the youngest railcar fleets in the country. The company is the market leader in the transport of scrap and ferrous metal. About 348,000 railcars or over 35 percent of Russia’s total fleet is now privately owned, against 25 percent five years ago.

Russia’s railways system, the world’s second largest after the US one, handles 93 percent of the country’s cargo transportation, excluding pipelines.

Before the IPO, Cyprus-registered Transportation Investments Holding Limited had a 70 percent stake in Globaltrans with the remaining 30 percent held by Envesta Investments Ltd, also registered in Cyprus. Up to 30 percent of Globaltrans’ equity was offered in the IPO, half representing the placement of existing shares and half that of new shares.

Sergey Maltsev, CEO of Globaltrans commented: “We believe that the success of our recent IPO shows that investors recognise the potential of the Russian rail freight sector and endorse our strategy for realising it. We know that the EBRD has a strong interest in the development of the Russian infrastructure sector and we welcome EBRD as a shareholder and an institution with deep experience of and familiarity with the Russian market.”