Chemezov Wants to Boost KamAZ Stake

Russian Technologies is looking to obtain control of KamAZ and is in talks to purchase a 13 percent stake from Troika Dialog, although shareholder Daimler would have to turn down the stake first, sources close to the talks said.

The state corporation wants to buy the stake to obtain control of the plant, a high-level source in Russian Technologies told Interfax. Vedomosti confirmed the information with sources at KamAZ and its shareholders.

“We were a portfolio investor from the beginning and weren’t planning to hold on to these assets for long. KamAZ now has more than 60 percent of the market. It’s a good asset,” a source in Troika Dialog said. The deal could signed by the end of this year or in early 2010, he said, adding that the bank did not plan to sell the rest of its stake.

Troika currently owns 44.4 percent of the truck maker.

The Interfax source said the stake could be bought for $300 million to $320 million, valuing KamAZ at $2.3 billion to $2.5 billion. Last year, Troika sold a 10 percent stake to Germany’s Daimler for $250 million.

The price range is three times higher than KamAZ’s market price, which was $806 million Wednesday based on its shares on the RTS. The Troika source told Vedomosti that the Interfax figures “were close to the truth.”

A source close to Russian Technologies, however, said he did not know where those figures came from. “We’ve only just started discussing a deal, and it’s not clear what the final price will be. The market prices will also be taken into account during the negotiations,” he said, adding that it was not yet determined how Russian Technologies would finance the deal.

The source at Troika said Daimler had right of first refusal for the shares. “We’re required to offer the stake to the German concern, and we can only sell it to Russian Technologies if they refuse,” he said. The issue has been discussed with Daimler, which is prepared to decline the right to the shares, he said.

A Daimler spokesman declined to comment.

There is, however, one other difficulty with the deal. Troika Dialog’s 44.4 percent also includes an option for KamAZ management. Vedomosti’s sources declined to say whether the plant’s managers would receive money in the deal.

VTB Capital analyst Yelena Sakhnova said KamAZ wasn’t a bad asset, but it wasn’t clear why anyone would be willing to overpay for it now, when everyone is trying to buy assets for less. It’s unlikely that Daimler would exercise its right to the stake, since it is tight for cash and 10 percent is a blocking stake under KamAZ’s latest charter, she said.