The Russian Direct Investment Fund (RDIF) has formed a consortium comprising leading Middle Eastern funds and finalized a deal to acquire a minority stake in Russian Helicopters, the helicopter design and manufacturing company, from Rostec. Russian Helicopters valuation was estimated at $2.35 billion.
The transaction consists of two stages. The first stage involves the sale of a 12% stake and an investment of $300 million, as well as an agreed-upon subsequent potential increase in investment to $600 million. This will accumulate a significant amount of funds within the Company. These funds are necessary for the implementation of the Company’s strategy and business plan, including the development of new types of helicopters. In addition, these funds will help implement the investment program of the holding company, as well as finance possible M&A activities aimed at increasing the holding’s value and finance capital programs.
The deal with the funds became known in mid-2016, but then Rostec reported that they would sell a 21.5% stake, it was assumed that the consortium will then receive up to 25%. This was preceded by a three-year search for a strategic investor. This role was considered by AgustaWestland (part of the Italian Leonardo), but agreement was not reached. In 2011 the option of an IPO of “Russian Helicopters” was studied in London with more than $500 million public offer.
Kirill Dmitriev, CEO of the Russian Direct Investment Fund (RDIF), said:
“Russian Helicopters has established itself as one of the world’s leading helicopter manufacturers with a growing presence in key emerging markets. The RDIF consortium’s investment in Russian Helicopters will enable the company to continue its expansion into new markets, particularly in the Middle East, thanks to the participation of our partners from the region. Russian Helicopters is an attractive long-term investment opportunity with significant growth potential.”
“It is not excluded that investors from India can participate further in the transaction”, said the head of Ministry of Industry and Trade Denis Manturov. There are about 250 Russian-made helicopters by the end of 2016 in India/ Moscow and Delhi signed an agreement on joint production of 200 Ka-226T for the Indian army.
Sergei Chemezov, General Director of the State Corporation Rostec, said:
“Today we have agreed with the Russian Direct Investment Fund and Middle Eastern investors, on the final parameters of the deal and signed documents for the sale of a minority stake in Russian Helicopters, based on the valuation of the company at $2.35 billion.”
Andrey Boginsky, CEO of Russian Helicopters, said:
“Russian Helicopters aims to strengthen its position as a leader in the global helicopter market through the continued development of new products, the provision of a leading after-sales service and a focus on expanding operations into new emerging markets. The consortium of investors, led by RDIF, will allow us to accelerate the implementation of our growth strategy.”
Russian Direct Investment Fund (RDIF) was established in 2011 to make equity co-investments, primarily in Russia, alongside reputable international financial and strategic investors. RDIF acts as a catalyst for direct investment in the Russian economy. RDIF’s management company is based in Moscow. Further information can be found at www.rdif.ru
Russian Helicopters was founded in 2007 and is one of only six major players in the global market, with the ability to design, manufacture, test, and maintain helicopters. The company employs over 45,000 people and has manufactured over 8,000 helicopters operating in over 110 countries. Further information can be found at http://www.russianhelicopters.aero/en/