Russian Helicopters, has shelved its initial public offering at the London stock index this week because of a lack of demand for shares, adding to the list of Russian companies that have failed to make it in Europe.

“While the IPO would serve the Russian government’s strategic vision for the industry, we are also very conscious of the value of our asset,” Andrei Reus, head of the helicopter maker’s main shareholder Oboronprom, was quoted as saying Wednesday by Russian news agency RIA Novosti. “Based upon constructive conversations we have held with potential investors over the past few weeks, we believe market participants will benefit from more time to reflect upon the true value and growth potential of our business.”

The company was seeking to raise up to $500M by issuing $250M in new shares and selling $250M more currently held by Oboronprom.  Several other Russian companies have had to suspend their IPOs this year because of a lack of interest.

Russia is the world’s second-largest exporter of arms behind the United States. Next to tanks and fighter jets, Russian-made helicopters are among the best-sold products — albeit mainly to developing and emerging countries, which value the Russian price-performance ratio.  The Kremlin recently detailed plans for a $650 billion arms procurement program aimed at modernizing Russia’s armed forces until 2020. It includes plans to purchase as many as 1,000 helicopters.

Jeremy Parkin – HeliHub.com