Full steam ahead: Siemens sells stake in Ural Locomotives
Siemens sold its stake in Ural Locomotives for 2.1 billion rubles, the buyer was a hitherto unknown joint-stock company Otavit, Izvestia learned. The government commission approved the deal at a meeting on April 3, according to the minutes of its meeting. The Ministry of Industry and Trade must ensure that the plant, which has lost its Western shareholder, actively develops. This year, the company must produce at least 98 electric train cars, in 2026 - at least 106 units, in 2027 — at least 207 units.
What details about the deal are known now
Siemens Mobility, which announced its withdrawal from Russia back in 2022, sold its stake in the Ural Locomotives joint venture. This plant produces electric trains, including the Swallows, which are popular in Russia. Otavit Joint Stock Company became the buyer of the share of the German company. This follows from the minutes of the April 3 meeting of the government commission for the Control of foreign investments, which were reviewed by Izvestia. The chairman was Finance Minister Anton Siluanov.
Siemens Mobility confirmed to Izvestia that the deal has already taken place and the company has left the Russian Federation, as it announced back in 2022.
— Siemens Mobility has sold its minority stake in the Russian joint venture UL (Ural Locomotives. — Izvestia) in accordance with current EU sanctions and is no longer involved in the joint venture. The deal is in line with Siemens AG's decision to withdraw completely from the Russian market. It was decided not to provide any additional details about the deal," the company noted.
"Otavit" has not actually been heard in Russian business so far. This is not surprising, because the joint-stock company was registered in Moscow only in June 2024 with the profile "consulting on commercial activities," according to SPARK. Its CEO Evgeny Soppa, in addition to consulting, took up the construction business in Yekaterinburg in the crisis of 2022.
The Ural Locomotives joint venture was established in 2010 by the Sinara Group (51%) and the Siemens AG concern (49%). It is located in the city of Verkhnyaya Pyshma, 7 km north of Yekaterinburg. The joint venture, among other things, was engaged in the production of passenger high-speed electric trains under the commercial name Lastochka, created on the Siemens Desiro platform for Russian Railways. In November 2013, Ural Locomotives launched mass production of Swallows in the presence of Vladimir Putin. Siemens announced the termination of business in Russia in May 2022, and in the summer of 2023 Ural Locomotives localized the production of Swallows. In December 2023, Siemens estimated losses from the sale of the business and the termination of operations in Russia at €600 million.
According to SPARK, the formal 100% owner of Ural Locomotives is now Urals Locomotives Holding B.V. It is its 100 thousand shares that Otavit buys at a price of 2.157 billion rubles, follows from the documents of the Board of Directors. Siemens will not receive 35% of this amount, which the Russian company will transfer to the country's treasury, according to the law, this is a contribution from a foreign company for exiting the asset. In the first month after the deal, the budget will receive 25% of the proceeds, followed by two tranches of 5% annually in 2026 and 2027.
Izvestia sent inquiries to the Ministry of Finance, the Ministry of Industry and Trade, Ural Locomotives, and Sinara Group.
What will happen to Ural Locomotives after the deal
The control over the transaction will remain with the Ministry of Industry and Trade, the protocol says. The agency will also have to ensure that Ural Locomotives develops in 2025, 2026 and 2027. So, the document specifies specific standards for the results in physical and monetary terms.
For example, the company must adhere to the minimum dynamics in the production of electric train cars — 98 units will be produced in 2025, 106 next year in 2026, and 207 in 2027. A similar approach has been established for locomotive sections: 219 units this year, and 192 units annually.
Revenue for the years should be: 45.1 billion rubles, 50.3 billion rubles, 101.2 billion rubles, respectively. The number of employees should also not fall below 4 thousand people. The rate of profitability in 2025 should be at least 2.3%, but in 2026 it may actually fall to zero — at least 0.2%, and then rise to 1%.
At the end of February 2024, Siemens Mobility filed a lawsuit with the Moscow Arbitration Court against the Ural company, the foreigners decided to collect debts and penalties totaling 1.1 billion rubles from their partner Sinara. There are no other details in the court files yet. Before that, in the middle of the month, the Germans announced their claims for 1 billion in arbitration in the Sverdlovsk region.
Siemens has been operating in Russia since 1852. In addition to Ural Locomotives, the Germans in Russia had joint ventures with other domestic companies. Among them is a joint venture with Power Machines, LLC Power Technologies of Gas Turbines (LLC STGT, engaged in the production and maintenance of gas turbines), 65% of which was acquired by Inter RAO in 2022. Its Dutch structure, RAO Intertech B.V.— bought the Voronezh plant of Siemens Energy ― Voronezh Transformer LLC (formerly Siemens Energetika Transformers LLC, which was part of the Siemens Energy division). The sum of these two transactions was estimated at €25 million.
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