MÁV Vagon, one of the major subsidiaries of the Hungarian State Railways (MÁV), is set to be privatized, with the majority of the company’s ownership transferring to a Hungarian private market participant. This move aims to bring a much-needed transformation to the four-decade-old railway vehicle fleet.
Approximately 75 per cent of MÁV Vagon Ltd is set to change hands to private ownership, as confirmed by the MÁV-Volán Group. This decision was made by the government and follows earlier signals from Transport Minister János Lázár, emphasizing the need to introduce private capital into the company.
According to the state-owned company, this change will enhance the efficiency of railway vehicle development and maintenance within the group. MÁV has highlighted that involving private capital can streamline the processes of maintaining and manufacturing railway vehicles. Nevertheless, the company has also underscored that MÁV Vagon will continue to be a subsidiary of MÁV-Volán, meaning that the alteration in ownership structure will not impact the terms of employment for the company’s workforce.
The new majority owner of the company will be Magyar Vagon Ltd, a key player in the Hungarian railway vehicle manufacturing and maintenance market, known as the owner of the Dunakeszi Járműjavító.
The signing of the contract is expected to take place in mid-October.
As per company records, Magyar Vagon Ltd has a connection to the Solva II Private Equity Fund. In the latest available financial year, the ownership resolution of Magyar Vagon Ltd indicates that Gran Private Equity Ltd acted on behalf of the Solva II Private Equity Fund as the sole owner exercising the rights of Magyar Vagon Ltd. Gran Private Equity Ltd, according to the Opten company register, is connected to Zsolt Hernádi. Hence, it can be noted that Magyar Vagon Ltd is
affiliated with the President and CEO of MOL,
who, as of the 2023 edition of the list, is the seventh most influential individual in Hungary.
According to MÁV, this transaction is expected to result in advantages such as enhanced competitiveness, transition to a more business-oriented operation, reduction in decision-making and repair lead times, improved material supply, an increase in the operational and business capability of MÁV-Start’s railway vehicles for passenger transportation, as well as a significant decrease in the average age of the rolling stock of MÁV-Volán Group. The privatization will also facilitate Hungarian participation in key Eastern Partnership and bilateral projects.
MÁV Vagon Ltd’s development capabilities and manufacturing capacity can effectively support these objectives. Furthermore, this transaction may also facilitate the market financing of vehicle manufacturing.
Sources: Hungarian Conservative/MÁV-Volán-Group/VG