Railcars acquisition for Astarta-Kyiv and Kernel to be value-creative — Concorde Capital

The payback period for Astarta-Kyiv’s new railcars is expected to be about four years and this can turn out to be even less if the company secures state compensation, such as what the Cabinet approved. Concorde Capital assesses the acquisition of railcars to be value-creative for both Kernel and Astarta.

The acquisition of railcars by large farming companies has become a market trend prompted by a deficit of railcars in the country and rising prices for their rent, Alexander Paraschiy, Head of Research at Concorde Capital, notes.

"State deregulation of daily use rates in January 2018 has prompted state monopoly Ukrainian Railway to hike rents several times," he said.

As previously reported, Kernel acquired 100% interest in Rail Transit Kargo Ukraine LLC (RTK-Ukraine) operating almost 3,000 railcars for the enterprise value of USD 64 million. Astarta-Kyiv in January-February 2019 purchased 130 grain hopper cars manufactured by Ukrainian producers Dniprowagonmash and Kryukov Railway Car Building Works.

The new infographic guide Agribusiness of Ukraine 2017/18 is available by the link.