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Moscow (UPI) May 12, 2011 Russian Helicopters, a company that makes civil as well as military choppers, shelved its initial public offering at the London stock index this week because of a lack of demand for shares, adding to the list of Russian companies that have failed to make it in Europe. "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," Andrei Reus, head of the helicopter maker's main shareholder Oboronprom, was quoted as saying Wednesday by Russian news agency RIA Novosti. "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." Famous for its Kamov and Mil Mi helicopter lines, the company wanted to raise as much as $500 million by dishing out $250 million in new shares and selling $250 million worth of stock held by Oboronprom to finance its debt, buy back shares and expand in emerging markets. Potential investors may have been put off by the relatively high share price that valued the company at nearly $2.4 billion. Several other Russian companies have had to suspend their IPOs this year because of a lack of interest. Russian Helicopters says on its Web site it is "a leading player in the global helicopter industry, the sole Russian designer and manufacturer of helicopters and one of the few companies worldwide with the capability to design, manufacture, service and test modern civilian and military helicopters." The company operates five helicopter assembly plants, two design bureaus, two components production plants, one overhaul plant and one helicopter service company providing aftermarket services in Russia and abroad. Russia is the world's second-largest exporter of arms behind the United States. Next to tanks and fighter jets, Russian-made helicopters are among the best-sold products -- albeit mainly to developing and emerging countries, which value the Russian price-performance ratio. The company should get significant business at home as well. The Kremlin recently detailed plans for a $650 billion arms procurement program aimed at modernizing Russia's armed forces until 2020. It includes plans to purchase as many as 1,000 helicopters.
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