Corp.s management will buy a 45.42-percent stake in their
company from Russian Technologies Corp., according to
Russian Technologies will
decrease its holding in the capital of VSMPO to blocking
shares, and management participation will increase to 50
percent plus one share. The deal is worth between $965 million
and $970 million.
holding of 4.6 percent will now be transferred, along with the
45.42-percent stake, into a joint venture created for the deal.
Under the terms of the agreement, 75 percent of the stake plus
one share will be owned by VSMPO-Avismas management and
25 percent minus one share will be owned by Gazprombank JSC.
The managers will pay $187 per VSMPO-Avisma share.
The weighted average price of
VSMPO-Avisma shares on the Russian stock exchange has been $161
apiece for the past three months.
The company has also increased
titanium output, VSMPO-Avisma said. "We expect production
volume to increase 10 to 15 percent yearly until 2015," Sergey
Chemezov, Russian Technologies chief executive officer,
said in a statement.
"There is an agreement with
Boeing (Co.) for high-tech products supply up to 2018, which
provides excellent growth prospects. In our view, this is a
good time to cede control to the management team that purchases
the stock with a considerable markup to market price."
The company will look to
increase volumes supplied to aerospace companies, in addition
to expanding into developing markets, according to VSMPO-Avisma
chief executive officer Mikhail Voevodin.
"Now the company controls about
30 percent of the titanium market," he said. "(Acquiring)
mining companies in Ukraine will give us a permanent source of
raw materialsas of today, we cover 30 to 40 percent of
our raw materials requirements. We plan further large
investments in this field in the future."
Earlier this week, Noble
Resources Corp., VSMPO-Avismas ferrotitanium sales agent,
had sent a letter to customers stating material produced by the
company could be contaminated with asbestos (
amm.com, Nov. 28).
A version of this article was first published by AMM
sister publication Metal Bulletin.