Russian Helicopters delays $500 million London IPO

11th May 2011, Comments 0 comments

State-controlled Russian Helicopters said on Wednesday it had postponed a $500 million stock flotation in London, indicating it had failed to attract enough interest from investors.

Russian helicopters, part of Russian state-controlled aerospace holding Oboronprom, said that "its offering of ordinary shares and GDRs has been postponed," without being more specific.

Andrei Reus, board member of Russian Helicopters and Oboronprom chief executive, said that although the initial public offering was in the interests of the company, it needed more time to weigh its options.

"While the IPO would serve the Russian government's strategic vision for the industry, we are also very conscious of the value of our asset," Reus was quoted as saying in a statement.

"Based on constructive conversations we have held with potential investors over the past few weeks, we believe market participants will benefit from more time to reflect upon the true value and growth potential of our business."

Russian Helicopters spokesman Roman Kirillov declined to release further details.

Ahead of its planned London IPO, the company launched a charm offensive congratulating Prince William, a Royal Air Force helicopter pilot, on his wedding with a Times advertisement:

"To one well known helicopter pilot from one well known helicopter manufacturer. We are both entering an exciting new phase in our lives."

The offer during which the chopper maker had hoped to raise $500 million was part of the government plan to attract investors and know-how by privatising stakes in key state-controlled companies.

Chris Weafer, chief strategist at UralSib investment bank in Moscow, said that "the uncertainty over sluggish economic recovery and political succession makes Russia a more difficult market for equity issuance" in 2011.

This yearfive of the nine Russian IPOs including Russian Helicopters were "all pulled because of inadequate investor demand at the asking price," Weafer said in a note to clients.

© 2011 AFP

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