General Electric May Sell Train Engines to Russian Railways Subsidiary

By Rich Smith – Feb 2, 2013 at 2:58PM

NYSE: GE

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Memorandum of understanding envisions a minimum of 100 locomotive sales over five years.

On Friday, General Electric's (GE -1.75%) Transportation unit announced that it has signed a "memorandum of understanding" with Russian firms Locorail and Yakutia Railways aimed at exploring a "strategic relationship" for modernizing the latter's diesel-electric locomotive fleet.

The memorandum envisions that GE will sell at least 100 FDL engine kits to Yakutia Railways over a five-year term, train the companies' employees to maintain and service the engines, and supply tooling and equipment necessary for the engines' upkeep. However, at this time, no actual agreement to sell the engines has been signed.

Locorail is a Dutch consortium that specializes in building railroads. It is jointly owned by three construction companies -- France's VINCI Concessions, Belgium's Compagnie d'Entreprises CFE, and the Netherlands' BAM PPP. Yakutia Railways is a Russian railroad transportation company and a subsidiary of JSC Russian Railways.

Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool owns shares of General Electric. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.