MWTP is ready to go for sale

Minsk Wheel Tractor Plant is being sold to a Russian state corporation Rostec.

Belarus’ State Committee for Property offered the Russians 75% minus one share of the company. The general director of the Rostec corporation Sergei Chemezov reported about that. However, the deal may not take place, since the evaluations of the Belarusian and Russian parties differ by several times, RBC Daily reports.

“The evaluation of these shares is taking place now. An option of an investment in the enterprise by the Russian party is being considered by the means of an additional share emission, which means that the money from the sale will go for the development of the enterprise. It is possible that the negotiations will finish till the end of the year”, - he noted. The products of this enterprise are of a strategic character for Russia. MWTP produces platforms for air defense systems and anti-aircraft missile systems.

A source, close to the negotiations, told that it is hard to estimate the value of MWTP: the main and the only client is the Ministry of Defense of the Russian Federation, and, on the one hand, the asset is very interesting for Russia, on the other hand – the enterprise’s long-term perspectives are not very clear. According to Sergei Chemezov, “so far it is early to speak about the price, since due diligence has not been carried out yet”. A trump card in the negotiations may be the fact that KamAZ (49.9% of the shares of which belongs to Rostec) plans on starting its own production of similar platforms in 2016.

The director of the analytical department of an investment company Region Valeriy Vaisberg notes, that according to MWTP’s accounting the enterprise may cost approximately 31 million dollars. Its value will be increasing, since the earnings increase with the preservation of the average profitability of 15%, the expert notes. According to MWTP’s accounting, the plant’s earnings accounted for 36.5 million dollars in 2010, in 2011 it reached 61.8 million dollars and in 2012 the plant earned 130.5 million dollars. One of the sources, familiar with the deal, notes that good financial indicators gave the Belarusian party grounds for asking four times more for the enterprise.