PRESS: Transmashholding sells Hungarian business to local partner

MOSCOW, Jun 28 (PRIME) -- Russian railway equipment producer Transmashholding has sold its Hungarian business to local partner Magyar Vagon Zrt, Vedomosti business daily reported on Tuesday quoting Transmashholding CEO Kirill Lipa.

Challenges in doing settlements became a serious obstacle for cooperation with the Hungarian partners. Transmashholding had been working through a Hungarian subsidiary of Sberbank, but the sanctions forced the bank to close it. Opening an account with a Hungarian bank is impossible for a Russian company, Lipa told the business daily without disclosing the sum of the sale.

Vedomosti said that TMH International, a subsidiary of Transmashholding, had two joint ventures with Magyar Vagon Zrt that the two companies owned on a parity basis – TMH Hungary and TMH Hungary Invest. The latter acquired 90% in Hungarian rail car producer Dunakeszi in 2020 for about U.S. $25–30 million, while the former signed a 1 billion euro deal with the Egyptian National Railways in 2018 on supplies of 1,300 railcars in the next five years.

Per the contract with the Egyptian National Railways, Tver Carriage Works of Transmashholding was to deliver the first 650 railcars, while Dunakeszi the other half.

“We were to ensure localization of 51% in Hungary as per financing conditions … this is why we were to deliver only a certain part of products from Tver in any case. The Tver part of the deal has been implemented, the Russian side has finished all the industrial, trade, economic, and commercial cooperation,” Lipa said as quoted by the business daily.

Transmashholding retained the design documentation for the railcars, as well as engineering support, operating planning, and coordination of the project. The Hungarian part of the deal will be implemented without participation of Transmashholding, which delays the project, but it still should be finished in April 2025, he said.

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