Russian Helicopters, which designs and manufactures civil and military rotorcraft, has indefinitely suspended an initial public offering (IPO) in which it expected to raise $500 million in London and Moscow, the company said on Wednesday.
The company suspended the IPO after it had failed to receive enough bids due to the complex market situation and will probably give up its IPO plans for this year, media reported on Tuesday citing sources close to the offering.
"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," said Andrei Reus, Chief Executive of the company's core shareholder Oboronprom, the state defense industry holding.
"Based upon 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," Reus said.
"The date of May 11, 2011 previously scheduled for the placement of securities has been changed. Information on a new date will be determined by the issuer's authorized body," the company said in a statement.
The company intended to hold the IPO in May by placing ordinary shares held by Oboronprom, and new shares represented by Global Depositary Receipts (GDRs), with one GDR representing one ordinary share. The price guidance for GDRs was set at $19-25 while the company was provisionally valued at $1.805-2.375 billion.
The company said earlier it intended to use the proceeds from the offering to repay existing debt and to buy back shares from minority shareholders.
MOSCOW, May 11 (RIA Novosti)
