MOSCOW, September 12 (RIA Novosti) - Rosoboronexport, Russia's state arms trader, has bought a 41% stake in titanium giant Vsmpo-Avisma [RTS: VSMO] from a consortium of investors, Renaissance Capital Group, which leads the group of investors, said Tuesday.
Vsmpo-Avisma, which is based in the Perm Territory in the Urals and employs about 7,500 people, is an attractive asset because it controls a third of the world's titanium market. Its main partners are U.S. and European aircraft giants Boeing and Airbus, who account for 30% of its earnings. Preliminary estimates show the corporation's earnings in 2005 in line with U.S. GAAP were $746 million, with a net profit totaling $228 million.
Today Renaissance Capital Group announced the sale of a 41% stake in Vsmpo-Avisma, the world's biggest producer of titanium products, to the federal state unitary enterprise Rosoboronexport, which performs the functions of an intermediary in the import and export of products, technology and services of military designation, Renaissance Capital said in a statement.
Boeing [NYSE: BA] and Russian titanium monopoly Vsmpo-Avisma announced August 11 the establishment of a joint venture with an authorized capital of $60 million to assemble titanium parts for Boeing passenger liners.
The United States announced August 4 sanctions against Russian state export agency Rosoboronexport and state-owned plane maker Sukhoi over their cooperation with Iran and alleged violations of non-proliferation commitments. But titanium supplies to Boeing will be unaffected by the sanctions because they apply to purchases by U.S. government agencies rather than by private companies.
Vsmpo-Avisma was established in July 2005, when Avisma (Special Aviation Materials, a Soviet-era enterprise) merged with Vsmpo (Verkhnaya Salda Metallurgical Production Association).
