January 28, 2020 / 2:01 PM / in a month

Russian Railways may sell part of Gefco to strategic investor

MOSCOW, Jan 28 (Reuters) - Russia’s state railway monopoly is seeking a strategic investor to purchase part of its stake in logistics firm Gefco, said Andrey Starkov, deputy chief executive of Russian Railways.

Gefco, which services the car industry, is a former subsidiary of France’s PSA Group. The French carmaker sold 75% of the company to Russian Railways for 800 million euros ($887.5 million) in 2012.

Russian Railways is looking to bring in an investor to help Gefco develop its business on new markets, Starkov told reporters.

“China, the Persian Gulf countries, - these markets are extremely interesting from the point of view of Gefco’s expertise, but Gefco only has a fairly limited presence there at the moment,” he said.

Russian Railways wants to keep between 40% and 50% in Gefco for itself, he said, adding that the Russian Direct Investment Fund (RDIF) could take part in the financing.

The Russian monopoly had been considering selling part of its stake in Gefco in recent years but had planned to retain control over the company and continue consolidating its financial results.

In late 2018, it had been planning to sell 25% of Gefco’s shares during an initial public offering (IPO) of the latter in Paris.

PSA, which owns 25% in Gefco, planned to sell more than 15% of the company. None of these deals ever materialized because Gefco postponed its IPO to wait for more favourable market conditions.

“We have not given up on the idea of the IPO as the main instrument (to reduce our stake), but we need to look at the market situation, and so far it is quite complicated,” Starkov said. ($1 = 0.9014 euros) (Reporting by Gleb Stolyarov; writing by Polina Devitt; editing by Louise Heavens)

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