State-owned Russian Technologies (Rostekhnologii) will divest a 45.42% stake in titanium giant VSMPO-Avisma for $970m.
Cyprus-based Nordcom, a joint venture between the management and Russia’s Gazprombank, will purchase the stake in the titanium company for $187 a share.
Combined with Nordcom’s earlier shareholding of 4.6% in the firm, the JV will own a 50.1% majority interest in VSMPO-Avisma.
Rostekhnologii will be left with a blocking stake of 25% plus one share, which allows the state corporation to veto decisions by the VSMPO board of directors.
While Russian Technologies seeks to repay the $790m loan from Sberbank and VTB, taken to purchase a 66% stake in VSMPO, the deal also opens the door towards privatisation in Russia.
The deal will be mostly financed with a loan from Sberbank and the remainder will be provided by a consortium of banks, reports RIA Novosti.
"About $492-$495 million will be financed through Sberbank and the remainder through a consortium of banks," VSMPO-Avisma’s CEO Mikhail Voevodin said.
Gazprombank said in a statement, "Partnership with the VSMPO-Avisma top managers in this project ensures guarantees of very high motivation of the corporation’s management in the implementation of the tasks for its development."
Image: VSMPO-Avisma holds a 30% market share in the global supply of titanium. Photo: Alchemist-hp.