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. Last Updated: 07/27/2016

RosAtom in Talks Over OMZ Stake

Yekaterinburg-based United Heavy Machinery, or OMZ, could soon transfer its ownership to companies under the Federal Atomic Energy Agency, or RosAtom, as the state looks to restructure the atomic power sector.

The agency and Gazprombank are in negotiations with OMZ to bring it under state control, a spokeswoman at the agency said Wednesday.

"Talks among the three are under way, but I cannot reveal any details," the spokeswoman said.

OMZ, which earns more than one-third of its revenues from equipment used in nuclear power plants, became the fourth Russian firm to list on the London Stock Exchange when it held its initial public offering in October 2003.

In November, Gazprombank acquired about 75 percent of OMZ shares from majority shareholder Kakha Bendukidze and through market trading. Another 10 percent of OMZ shares are held by the state treasury, while the rest are held by private investors.

From May 11 until the end of the month, Gazprombank will offer to buy a further 19 percent of OMZ shares for 230 rubles per share, 20 percent lower than the market price, Kommersant reported Wednesday. The shares will be temporarily consolidated on the books of a Moscow-registered company, Forpost-Management, before being transferred to Atomenergomash, a machine-building holding recently formed by nuclear fuel monopoly TVEL.

RosAtom has announced it plans to consolidate the state-controlled nuclear industry into a vertically-integrated holding run along market lines, and has said Russia will build 40 nuclear reactors by 2030.

Analysts said private investors would be unlikely to lose out, despite a shortage of listed machine-building assets. "All analysts have warned against buying OMZ since 2004, as it was clear the company was returning to state control," said Yelena Sakhnova, an analyst with Deutsche UFG.

Bendukidze took a job as Georgia's economy minister in June 2004.

"The machine-building sector is returning to the condition it was in 15 years ago -- a huge, vertically-integrated chain. The state sees it has the luxury to own it," said Alexei Dyomkin, an analyst at Trust investment bank.