Russian Helicopters defers LSE IPO
MOSCOW. May 11 (Interfax) - OJSC Russian Helicopters has decided to defer its planned IPO on the London Stock Exchange, a source has told Interfax.
The company issued an official explanation Wednesday morning, when it originally had planned to announce a placement price.
"After constructive discussions with potential investors, we came to the view that market players need to be given time to evaluate the company's true value and its prospects," the head of Russian Helicopters' parent company, the Russian state-run defense industry corporation Oboronprom, Andrei Reus is quoted in a company statement as saying.
Russian Helicopters announced a price range of $19-$25 per share and global depository receipt on April 26. Judging from that range, the company had been appraised at $1.805-$2.375 billion. But the price was not satisfactory to investors that had expressed interest in the stock based on company capitalization of $1.5 billion, or significantly less than valuation based on the low end of the price range, market sources told Interfax.
A source close to the company told Interfax that Russian Helicopters has yet to decide when to make a return to the market. "The banks are suggesting options - this fall or in a year," this source said.
The company and the banks organizing the IPO were expecting that placement volume would top $500 million. Investors were to be offered up to 30% of company stock. The plan was to sell up to $250 million worth of shares from an additional issue along with existing shares (including shares in the form of depository receipts) mainly to Oboronprom, Russian Helicopters' main shareholder.
Oboronprom intended to offer the placement book-runners an over-allotment option on up to 15% of the initial GDR volume at placement price.
One of the organizers, VTB Capital, has appraised the company at $2.5-$2.8 billion ahead of the IPO. Another, BoFA Merrill Lynch, put the figure at $2.2-$3.2 billion. BNP Paribas is the third organizer.
Russian Helicopters plans to use the funds raised to pay off its debt and finance the buyout of shares minority shareholders. Net debt was $932 million at the end of last year.
OJSC Russian Helicopters is a specialized management company set up in 2006 as a wholly owned Oboronprom subsidiary.
The company manages helicopter producers including OJSC Mil Moscow Helicopter Plant, OJSC Kamov , OJSC Ulan-Ude Aviation Plant, OJSC, Kazan Helicopter Plant , OJSC Rosvertol, among others