BT Signaling B.V. has signed an agreement to purchase a stake in the signalling equipment manufacturer United Electrical Engineering Plants, known as Elteza. Elteza is a subsidiary of Russian Railways (RZD). Initially, BT Signaling will purchase a 25 per cent stake in Elteza. Following further approval, BT Signaling will increase its stake to nearly 50 per cent. RZD will remain the majority shareholder. The agreement was signed at a ceremony in Moscow on December 13, attended by Pierre Beaudoin, President and CEO of Bombardier Inc. and Vladimir Yakunin, President of Russian Railways.
Elteza is Russia’s largest signalling equipment producer with more than 3,000 employees across seven manufacturing sites. The company focuses on the design, development and production of rail signalling equipment and automatic and remote train control systems which have been delivered in Russia, the Commonwealth of Independent States (CIS) and the Baltic states. The new partnership will be one of the first successful examples of the privatisation of a Russian Railways’ subsidiary and part of the modernization strategy of RZD.
Already strong partners in the signalling sector, Bombardier and RZD have a well established engineering joint venture, Bombardier Transportation (Signal) Ltd., in operation in Moscow since 1996. This partnership has worked in close cooperation with Elteza to equip over 90 Russian stations with BOMBARDIER EBI Lock 950 computer-based interlocking (CBI) technology. This new agreement will lead to the creation of an Elteza department dedicated to new technologies and focusing on the manufacture of products including EBI Lock 950 as well as the latest generation of wayside products.
Commenting on the announcement, André Navarri, President and COO of Bombardier Transportation, said: “This agreement is a landmark for Bombardier Transportation, increasing our already strong presence in the rail control sector in the region and expanding our signalling technology interests.” He added: “We value this opportunity to further develop our presence in Russia but also in CIS and Baltic States.”
Sergey Ermolaev, Chief Country Representative Russia and CIS of Bombardier Transportation, stated: “We have had a strong relationship with RZD for many years and this new agreement further confirms the strong reputation of our technology and our organisation. We are very pleased to be working together on this exciting venture and look forward to continuing to develop our operations in Russia.”
Completion of this transaction is subject to the approval of all required governmental authorities and to other consents and other usual conditions. The transaction is expected to be completed during the first quarter of 2011.