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. Last Updated: 07/27/2016

Rosoboronexport Eyes KamAZ

KamAZTruckmaker KamAZ has emerged as the next firm in the arms dealer's sights.
State arms dealer Rosoboronexport on Tuesday confirmed its interest in taking control of the government's stake in the country's top truck maker, KamAZ.

The confirmation comes just days after unconfirmed reports emerged that Rosoboronexport was interested in buying titanium maker VSMPO-Avisma and KamAZ.

"Rosoboronexport accounts for 30 percent of KamAZ exports, hence our interest," a Rosoboronexport representative said. But it is too early to talk about the size of the stake, he added.

"Rosoboronexport expressed such a desire," Valery Nazarov, head of the Federal Property Management Agency, said referring to the KamAZ reports, Interfax reported earlier Tuesday.

KamAZ declined to comment on Rosoboronexport's interest.

The possible transfer of the federal government's 34 percent stake in Tatarstan-based KamAZ to Rosoboronexport, which already has a representative on the KamAZ board, is the latest in a series of plans hatched by the government over the past year to get rid of its stake.

The government has long considered selling or listing the stake, having previously included it on a list of assets due for privatization in 2006.

It later decided, however, that KamAZ would fit better on its list of so-called strategic enterprises, as it supplies vehicles for the armed forces.

A presidential decree is required to remove an enterprise from the list of strategic enterprises, Dmitry Nikitenko, a spokesman for the Federal Property Management Agency, said Tuesday, without elaborating on the status of the KamAZ stake.

"If Rosoboronexport has a genuine interest, then there is no doubt about its ability to acquire the stake," said Slava Smolyaninov, an automotive analyst with brokerage UralSib. "Moreover, it shouldn't be ruled out that the stake would simply be handed over to Rosoboronexport because it's a state company."

Besides the federal government, KamAZ shareholders include Tatarstan's Land and Property Relations Ministry and state-run Vneshtorgbank.

Alexei Yazykov, an analyst with Aton, did not rule out that the arms dealer could take control of more than just the federal government's stake.

No structures affiliated with Rosoboronxport hold shares in KamAZ, Interfax cited Vladimir Artyakov, deputy director of Rosoboronexport, as saying Tuesday. Artyakov is also the newly elected board chief of AvtoVAZ and one of two senior Rosoboronexport executives given a senior position at AvtoVAZ over the past three months.

Separately, KamAZ said it had set up a $20 million joint venture with Cummins, U.S.-based engine maker, to produce 120- to 175-horsepower engines. The 50-50 joint venture will be called Cummins Kama.

KamAZ increased its revenues by about 12 percent to over $1.5 billion last year.

Staff Writer Lyuba Pronina contributed to this report.