Rostekhnologii Sells 45% VSMPO-Avisma Stake for $970 Mln

MOSCOW, November 27 (RIA Novosti) – State-controlled hi-tech corporation Rostekhnologii (Russian Technologies) is selling its 45.42 percent stake in the world’s largest titanium producer VSMPO-Avisma to a joint venture of VSMPO managers and Gazprombank for $965-970 million, VSMPO-Avisma’s CEO Mikhail Voevodin said on Tuesday.

The stock price of VSMPO-Avisma, which supplies products to aerospace giants Boeing and Airbus, was set at $187 per share compared with the average-weighted price of $161 per share in the Moscow Stock Exchange in the past three months.

“We are now submitting documents to the Federal Anti-Monopoly Service and will close the deal a week after approval,” Voevodin said.

VSMPO-Avisma’s stock jumped almost 4 percent on the news to 5,510 rubles ($178) per share on the Moscow Stock Exchange.

After the deal is closed, Rostekhnologii will have 25 percent plus one share in the titanium producer, the joint venture between VSMPO managers and Gazprom-affiliated bank will possess 50 percent plus one share while 24.98 percent of shares will stay in free float, including 13.2 percent held by Gazprombank.

The deal will be mostly financed with a loan from Sberbank and the remainder will be provided by a consortium of banks, Voevodin said.

“About $492-495 million will be financed through Sberbank and the remainder through a consortium of banks,” he said.

Gazprombank, one of Russia’s top five banks, said in a statement its participation in the deal was explained by the titanium producer’s growth prospects.

“The move to join the shareholders of the titanium corporation is prompted by calculations showing very good prospects for the growth of its capitalization. Partnership with the VSMPO-Avisma top managers in this project ensures guarantees of very high motivation of the corporation’s management in the implementation of the tasks for its development,” Gazprombank said.

“VSMPO-Avisma’s key importance as the supplier for such sectors as aircraft-building, energy, the chemical and defense industries seals a unique market niche for this corporation. And the company’s huge export potential makes investment in its capital very attractive.”


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