RZD awaits government directive on participation in United Transport Logistics Co
MOSCOW. Nov 27 (Interfax) - The Russian Railways (RZD) board of directors has tentatively approved the company's participation in United Transport Logistics Company (UTLC), by contributing stakes OJSC TransContainer and OJSC RZD Logistics, RZD said in a statement.
"The RZD board of directors will make a final decision on participation in the company's charter capital and the means of paying up its stake following receipt of the Russian government's approval," the statement says.
UTLC will carry container freight within the Common Economic Space, including transit freight between Europe and Asia. The agreement sets out the target parameters of the unified company. The business plan projects that the company will have freight turnover of 4.2 million TEU (20-foot equivalent unit) by 2020, and calls for investing about $6.2 billion in rolling stock, containers, terminals and other transport infrastructure.
UTLC is to be created in two stages. First RZD will contribute 50% plus two shares in TransContainer and 100% of RZD Logistics, while Belarusian Railway (BZD) and Kazakhstan's national railway company KTZ would make a monetary contribution. In the second stage, Belarus and Kazakhstan would contribute assets to the joint venture, with the former contributing Belintertrans and a terminal in Brest, and the latter contributing Kaztransservice and the terminals of Dostyk (owned by Kedentransservice, a joint venture between KTZ and TransContainer) and Altykon.
The co-founders' equity stakes in the new company will be based on the market value of the assets they contribute, although they would have the opportunity to equalize their stakes.
It was reported earlier that the framework agreement on creation of the joint venture was signed in June during the St. Petersburg International Economic Forum. In October the sides signed the term sheet agreement, which will serve as the basis for preparing the shareholder agreement. In order to find solutions to existing issues and speed integration, a team made up of representatives from the three railroad companies, TransContainer and RZD Logistics has been formed under the leadership of Zhanar Rymzhanov, an advisor to the RZD president.
