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Rosoboronexport raises stake in VSMPO-Avisma
Vladislav Tetyukhin, General Director of Corporation VSMPO-Avisma, is completing the sale of a 26 percent stake in the world's largest titanium producer to Russian state arms exporter Rosoboronexport, he told reporters on Wednesday.
Tetyukhin, who controlled 30 percent of VSMPO-Avisma’s stock, will have 3.88 percent after he completes the sale. He says the sale is necessary for the company’s further growth. “I think this will be good for the corporation. “Considering the current situation on the world titanium market and growth forecasts - the demand is expected to double or triple over the next five to ten years - selling VSMPO-Avisma shares to Rosoboronexport is the only way to speed up the company’s growth,” Tetyukhin said.
The acquisition brings Rosoboronexport’s holding in VSMPO-Avisma to about 68 percent. Avisma’s new Board of Directors will have seven members, including four representatives of Rosoboronexport and three VSMPO-Avisma managers.
Tetyukhin also outlined the company’s borrowing program for 2006-2007, saying VSMPO-Avisma was going to borrow between $300 million and $400 million from several banks and invest the money in production.
In September, Renaissance Capital sold its 41 percent stake in VSMPO-Avisma to Rosoboronexport. The price has not been disclosed.
VSMPO-Avisma, created through the merger of VSMPO and Avisma, is the world’s largest producer of titanium, accounting for 27 percent of the global market. Avisma produces an intermediate metal product, titanium sponge, from which VSMPO makes titanium alloys. Titanium products and alloys produced by VSMPO are the group’s main sales products.
Supplies to the US make up more than two thirds of Avisma’s magnesium products. VSMPO accounts for about 30 percent of titanium supplies to Boeing and about 60 percent of supplies to Airbus (including subcontractors). VSMPO’s clients include Goodrich, Pratt&Whitney, Rolls-Royce, SNECMA Moteurs, General Electric and their subcontractors.
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