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Gazprom Admits to OMZ Buy

A unit of state gas monopoly Gazprom has bought a controlling stake in heavy machinery firm OMZ, officials said Wednesday.

Gazprom had previously denied that it was behind the purchase, which came to light in a recent broker's note to investors.

Some analysts see the move, which came as a result of lengthy talks between Gazprombank and OMZ, as part of attempts by President Vladimir Putin's government to bring key strategic assets under state control.

The Urals region of Sverdlovsk --where OMZ's main production unit, Uralmash, is based -- said on its web site that Gazprombank had recently acquired the unspecified stake.

"A new owner of Uralmash has recently emerged -- Gazprombank has bought a controlling stake," it said.

OMZ, founded by businessman Kakha Bendukidze, who is also a Georgian government minister, was not immediately available for comment.

United Financial Group said earlier this month that it had organized a sale of 42.16 percent of OMZ to certain private investors. OMZ, with a market capitalization of $160 million, is one of Russia's biggest heavy industrial companies, producing key parts for nuclear reactors and other equipment.

The Kremlin has sought to tighten control over key sectors through Gazprom despite criticism from liberals who say that could harm the economy.

Gazfond, another Gazprom unit, controls about 15 percent in OMZ, while the rest used to be divided among the company's managers and subsidiaries.

OMZ's 2004 net profit under international accounting standards grew by 260 percent to $61 million.

(Reuters, MT)

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