UPDATE 2-Globaltrans buys $540 mln Metalloinvest unit

Fri Apr 27, 2012 5:30am EDT

* Will boost fleet of stock to around 60,000

* Will allow Metalloinvest to free up capital

* Three year service deal included

By Megan Davies

MOSCOW, April 27 (Reuters) - Russian freight firm Globaltrans Investment is buying the railcar unit of iron ore miner Metalloinvest for $540 million, boosting its fleet to around 60,000 units, it said on Friday, as it forecast more consolidation for the sector.

As part of the deal, Globaltrans will provide rail freight transportation and logistics services to Metalloinvest, controlled by Arsenal football club and Facebook shareholder Alisher Usmanov, Russia's richest man, for three years.

"(The deal) will increase the market share of the company ... and because of this three-year contract we will get access to a new cargo base," Chief Executive Sergey Maltsev told Reuters in a telephone interview.

Globaltrans said its fleet of rolling stock was nearly 48,000 railcars at the end of 2011 while Metalloinvest's was more than 9,000. The deal was a "very accretive acquisition of a high-quality asset", finance chief Alexander Shenets said.

It will give Globaltrans a 7 percent market share of overall cargo volumes in Russia, the world's largest country by territory, which relies on rail to deliver oil products, grain and steel to its home and export markets.

"It is an excellent strategic fit," Shenets added.

CONSOLIDATION TREND

Globaltrans, which raised cash via a secondary offering to buy a controlling stake in BaltTransServis in 2009, has said it is looking for acquisitions. [ID: nL6E8FC16U]

"We believe we are the key player in this market," said Maltsev, adding that consolidation in the sector is under way.

"So of course we will look very carefully at the trend and talk to other companies in the market but right now we wouldn't like to elaborate on that," he said.

More than 70 percent of Russia's freight rail fleet is now privately owned, Globaltrans said in a presentation.

This follows the privatisation of rail cargo operator Freight One, which had been controlled by Russia's railway monopoly Russian Railways until tycoon Vladimir Lisin won the auction for 75 percent of the asset last year. [ID: nL2E8FG0GS]

A decade ago, cargo owners relied on Russian Railways as the main fleet provider but this has shifted to a reliance on operators - both independent operators and Russian Railways subsidiaries, Globaltrans' presentation said.

Large private operators can service large cargo operators and act as consolidators in the industry, Globaltrans said.

For Metalloinvest, selling the unit will allow the company to free up capital, the company's chief executive Eduard Potapov said in a press release.

The companies said the deal was the first large-scale transaction between an independent private freight rail group and a large natural resources company in Russia.