Wednesday, 11 May 2011 at 10:43, Reuters, Moscow
State-controlled Russian Helicopters has delayed a $500 million London share flotation after failing to fill its order book, two sources close to the situation said, delivering a blow to the Russian state's privatisation plan.
The sale would have been the first initial public share offer of a government firm in 2011 and given foreign investors a rare chance to invest in Russia's defence industry.
The firm's books were due to close on Tuesday, but its investor roadshow overlapped with that of commodity trader Glencore's much-anticipated London and Hong Kong listing, which saw investors put in orders for all $11 billion worth of shares on the first day.
"There is a lot of attention on Glenore and getting attention on small-mid cap IPOs right now is difficult. It is difficult to get people to care," said one equity capital markets banker.
A spokesman for Russian Helicopters declined to comment.
The mixed track record for Russian companies attempting to list so far this year has also made investors cautious, the banker added.
Six Russian firms have now pulled IPOs after releasing Intention to Float documents, while just four have gone ahead with a share placing, raising just over $2bn.
Russian Helicopters, a holding company for 11 regional manufacturers that trace their origins to the early years of the Soviet Union, made just over $200m profit in 2010 and has been winning new orders from home and abroad.
Bank of America Merrill Lynch, BNP Paribas and VTB Capital were the joint organisers of the planned IPO.
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