Former Soviet arms company to seek investors in London
By Carl Mortished, International Business Editor
IRKUT, a former Soviet armaments firm, is seeking investors for a share placing that will value the company at up to $600 million (£335 million).
Directors of the Siberian aerospace company, which once made the feared MiG fighter-bomber and now manufactures Sukhoi fighter jets for export to India, arrive in London next week seeking buyers for 23 per cent of the company.
The once-secret aircraft manufacturer hopes to raise up to $138 million, which would give Irkut the financial muscle to expand its civil aircraft business and play a leading role in consolidating Russia’s aerospace industry.
Irkut was the first Russian defence company to be privatised, most of the shares are held by management with just 2 per cent floated on Moscow’s RTS exchange. Alexey Fedorov, Irkut’s president, has set the company firmly on a strategy of rapprochement with Western aerospace firms. A marketing joint venture with EADS, the European aerospace combine, will sell Irkut’s latest product, the BE-200, an amphibious jet that fights forest fires.
In December, Irkut contracted to supply floor plates for Airbus aircraft and last month Mr Fedorov hinted at a possible joint venture with BAE Systems to build a fighter trainer, the first joint military project between a Nato and former Soviet arms manufacturers.
Irkut has a $4.5 billion order book, mainly contracts with India and Malaysia for Sukhoi Su-30MK fighter jets. The Su-30 is a manoeuverable heavy fighter aircraft and a competitor to the Eurofighter and F/A-18. In 2002, Irkut made $528 million in sales from the Sukhoi, generating an operating profit of $103 million.
Credit Suisse First Boston is advising the company on its offer and the publication of a prospectus on a company once hidden from Western gaze. The public offering may be the first of many transactions as the Russian aerospace industry moves into a period of upheaval. The Kremlin recently signalled that it wants to consolidate the entities that own the designs of Russian aircraft. These include AVPK Sukhoi, from which Irkut obtains its licence to manufacture the Su-30MK. Irkut employs some 15,000 people, mainly at a vast aviation manufacturing facility at Irkutsk, near Lake Baikal
www.timesonline.co.uk
Interesting scenario, Sukhoi had a partnering agreement with Grumman some years ago on the X-29. Grumman cancelled the partnership soon some time after. Their obviously was not seen to be any benefit with a US partner. That valuation is also terribly low for a company that has been bragging about its order books.
By Carl Mortished, International Business Editor
IRKUT, a former Soviet armaments firm, is seeking investors for a share placing that will value the company at up to $600 million (£335 million).
Directors of the Siberian aerospace company, which once made the feared MiG fighter-bomber and now manufactures Sukhoi fighter jets for export to India, arrive in London next week seeking buyers for 23 per cent of the company.
The once-secret aircraft manufacturer hopes to raise up to $138 million, which would give Irkut the financial muscle to expand its civil aircraft business and play a leading role in consolidating Russia’s aerospace industry.
Irkut was the first Russian defence company to be privatised, most of the shares are held by management with just 2 per cent floated on Moscow’s RTS exchange. Alexey Fedorov, Irkut’s president, has set the company firmly on a strategy of rapprochement with Western aerospace firms. A marketing joint venture with EADS, the European aerospace combine, will sell Irkut’s latest product, the BE-200, an amphibious jet that fights forest fires.
In December, Irkut contracted to supply floor plates for Airbus aircraft and last month Mr Fedorov hinted at a possible joint venture with BAE Systems to build a fighter trainer, the first joint military project between a Nato and former Soviet arms manufacturers.
Irkut has a $4.5 billion order book, mainly contracts with India and Malaysia for Sukhoi Su-30MK fighter jets. The Su-30 is a manoeuverable heavy fighter aircraft and a competitor to the Eurofighter and F/A-18. In 2002, Irkut made $528 million in sales from the Sukhoi, generating an operating profit of $103 million.
Credit Suisse First Boston is advising the company on its offer and the publication of a prospectus on a company once hidden from Western gaze. The public offering may be the first of many transactions as the Russian aerospace industry moves into a period of upheaval. The Kremlin recently signalled that it wants to consolidate the entities that own the designs of Russian aircraft. These include AVPK Sukhoi, from which Irkut obtains its licence to manufacture the Su-30MK. Irkut employs some 15,000 people, mainly at a vast aviation manufacturing facility at Irkutsk, near Lake Baikal
www.timesonline.co.uk
Interesting scenario, Sukhoi had a partnering agreement with Grumman some years ago on the X-29. Grumman cancelled the partnership soon some time after. Their obviously was not seen to be any benefit with a US partner. That valuation is also terribly low for a company that has been bragging about its order books.