In a letter to the head of Russian Railways Oleg Belozerov, the first deputy of the company, Vadim Mikhailov, offered to sell the last car-repair “subsidiary” – JSC “VRK-1”. Izvestia has a copy of the letter, its authenticity was confirmed by a source in the company.
“The sale of the asset on the free market will strengthen the competition between car repair enterprises, create conditions for reducing the cost of repairs and improving the quality of services provided,” says Vadim Mikhailov.
Although after the sale in 2019-2020 of two other car-repair subsidiaries (VRK-2 and VRK-3 for 19.4 billion rubles), Russian Railways wanted to leave VRK-1 within its own perimeter for the stable functioning of the segment, regardless of how the situation develops. in the market, said Andrei Starkov, who held the post of deputy head of Russian Railways until mid-March 2021.
In conditions of low demand for rolling stock repair services, increased competition and a decline in the market price for scheduled repairs, VRK-1 is expected to reduce its profitability from 1.4% in 2019 to 0.4% in 2025, which will lead to a decrease in shareholder value companies, the document says. Compared to VRK-2 and VRK-3, the capabilities of VRK-1 to optimize the cost of repairs are limited due to the social and other obligations of Russian Railways, the cost of fulfilling the mobilization task and localization of the depot in large cities and regions with a higher level of wages, indicated in letter.
If Oleg Belozerov agrees with the proposal to sell VRK-1, measures will be taken to assess the market value of its shares, the asset will be included in the register of non-core assets, and a corresponding appeal will be prepared to the Chairman of the Board of Directors of Russian Railways, First Deputy Prime Minister Andrei Belousov, who oversees transport in government, the letter said.
Read more in the exclusive material from Izvestia:
The depot is acquired: Russian Railways wants to sell the last car-repair “daughter”