Russian Railways is looking to sell a controlling stake in its Freight One unit to a strategic investor, a senior official from the state rail monopoly was quoted as saying.

Russian Railways had previously talked about an IPO of Freight One but more recently discussions shifted towards the sale of a stake to an outside investor.

Russian railways "is relinquishing control in favour of a strategic investor", news agency Interfax quoted Senior Vice President Valery Reshetnikov as saying. "We will retain a blocking stake, but we should not take part in operational management."

Russian Railways is seeking to sell off stakes in units including Freight One and Transcontainer as part of a multi-billion-pound programme to designed to raise funds to update its ageing infrastructure.

Oil trader Gennady Timchenko and metals tycoon Vladimir Lisin, Russia's richest man, are among potential strategic buyers for the controlling stake in the unit, also known as First Freight Co, financial sources previously told Reuters.

"If Russian Railways agrees to sell a controlling stake then they will be the main contenders," said one source. (Reuters)