IAPO
IAPO to sell 20 percent of it’d shares for 100 million IAPO to sell 20 percent of it’d shares for 100 million
One of Russia’s leading aircraft manufacturers will today announce details of an initial public offering on the domestic stock market for next March likely to value the company at more than $500m, according to people familiar with the plans.
Irkut Corporation, manufacturer of the Be-200 seaplane and the Sukhoi military aircraft, intends to sell 20 per cent of its shares to investors for about $100m, in the largest IPO yet on the fledgling but fast growing Russian equity market. It plans to follow up with a London Stock Exchange listing one year later.
The company has already appointed the Moscow-based MDM Bank as lead manager, and is in advanced discussions for the choice of international banks, lawyers and public relations consultants for the IPO.
The quotation will represent a fresh diversification for investors into listed Russian companies away from the energy sector which currently dominates the stock market, and a pioneering move into the strategically sensitive aerospace sector.
In preparation for the listing, Irkut is to announce unaudited 2002 financial results in accordance with US generally accepted accounting principles, showing earnings before interest, tax and depreciation of about $100m, on sales of over $500m. It has an order book of more than $4.5bn.
Irkut’s shares will trade on both the RTS and the Micex exchanges, in common with Russia’s two previous, but much smaller, introductions following the August 1998 financial crisis: the pharmacy chain 36.6 and the information group RBK or RosBusinessConsulting. Under new Russian securities legislation, companies are obliged to obtain and maintain a domestic listing for several months ahead of being allowed to sell shares on foreign exchanges.
Irkut, which is based in the Siberian city of Irkutsk, combines a number of manufacturers and design bureaux brought together in 2000. Its restructuring reflects broader initiatives undertaken over the past three years by both private companies and the Russian government to consolidate the fragmented sector in an effort to relaunch new aircraft.
The amphibious Be-200, which was first tested in 1998, was put on show during President Vladimir Putin’s recent trip to Italy to meet premier Silvio Berlusconi. It represents an attempt to diversify into commercial aviation, for applications including fire-fighting. The company says it is in discussions for sales to China, South Korea, Israel and Greece.
Most of Irkut’s current orders are for a range of Sukhoi military fighter jets and trainers, but the management has set out a strategy to balance future sales evenly between military and commercial aircraft.
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