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Brunswick Rail acquires rail operator Proftrans

Brunswick Rail, Russia’s leading railcar operating lessor, announced today the purchase of the rail operator Proftrans.
Proftrans specializes in the transportation of metal cargoes by rail. The company’s rail fleet consists of 1,647 gondolas with an average age of 3.5 years. This transaction both increases the lessor’s railcar fleet and widens the array of services that Brunswick Rail can offer.

Commenting on the deal, Brunswick Rail Deputy CEO and Director of Business Development Vladimir Khoroshilov noted that Proftrans was a very good acquisition for the company.

With this deal the company has not only expanded its fleet and client base — but has also gained the ability to act as a rail operator on commercially attractive routes.

Viktor Mostovoy, CEO of Proftrans noted that Brunswick Rail is well known as one of the leading players on the market. The company is very happy to join such a strong company and is certain that its future together will be interesting and successful, said Mostovoy.

Brunswick Rail Head of Corporate Finance Victor Koshkin added that the deal is interesting and unique because Brunswick Rail has purchased a successfully operating business instead of just railcars.

This demonstrates that the company is able to grow through the acquisition and integration of businesses that are of interest, and that Brunswick Rail can be an active participant in the coming consolidation of the rail market, said Mostovoy.

Brunswick Rail is Russia’s leading freight railcar operating lessor, with a fleet of over 18,000 modern railcars. Independence, a strong strategic track record and in-depth market knowledge have allowed Brunswick Rail to earn its position as a reliable partner for many of Russia’s blue-chip industrial and transportation companies.

The majority of the company’s railcars are gondolas (67%) and mineral hoppers (20%), with box cars, universal platforms and tank cars making up the remainder (13%).

In spite of its economic cataclysms, 2008 was a very successful year for Brunswick Rail allowing the company not only to considerably increase the railcar fleet but also to accumulate substantial financial reserves.

Brunswick Rail was the first in Russia to offer railcar rolling stock operating leases. Last year, Brunswick Rail raised $54 million — VTB Capital Private Equity and Special Situations and UFG Private Equity have decided to become shareholders in Brunswick Rail.

Brunswick Rail raised another $500 million financing as a combination of equity, mezzanine and debt financing with capital provided by current shareholders, a number of international investors, banks, the International Finance Corporation (IFC) and European Bank for Reconstruction and Development (EBRD).

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