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. Last Updated: 07/27/2016

Russian Partner to Oppose Sale of Hungarian Busmaker

BUDAPEST -- The Russian part-owner of Hungary's troubled bus-maker Ikarus Jarmugyarto Rt said it would oppose the sale of the company to strategic investors.

"The only aim of strategic investors is to eliminate their competitor [Ikarus]," Alexei Lyubinsky, the chief executive of ATEX, said Thursday. "They would only use Ikarus as a parts maker.

"What Ikarus needs is financial investors. We cannot support any plans that involve strategic investors."

ATEX owns only 31.7 percent of Ikarus but has the right to veto major decisions involving the company. Most of the remaining shares are owned by the Hungarian government.

The Hungarian government has been trying to find a buyer for Ikarus for years, focusing mostly on strategic investors -- truck and bus makers.

Volvo expressed interest in buying the firm earlier this year, but so far, talks have not borne fruit.

ATEX bought its stake in 1991, but both it and the Hungarian government have said other investors are needed.

Lyubinsky said ATEX's owners, a consortium of municipalities and transit authorities in the former Soviet Union, need Ikarus to continue making buses.

Some 140,000 Ikarus buses are in use in ex-Soviet states, and the municipalities' repair and maintenance facilities are geared to handle the brand, which is also cheaper than the competitors, he added.

Ikarus was the main bus supplier of the former East Bloc, and its city buses continue to ply streets across the old Soviet empire.

But production has declined since the fall of communism to a projected 1,200 buses in 1996 from over 10,000 less than a decade ago.

Ikarus expects to sell 2,500 buses in 1997, and 1,500 would go to the former Soviet Union, Lyubinsky said.