MTU Aero Engines will make an initial public offering of its shares in the first half of June. The company, owned by US-based private investor Kohlberg Kravis Roberts (KKR), will offer "50% or more" of its shares in a free float.

"The underlying conditions for a successful stock exchange launch for MTU seem good," says chief executive Udo Stark.

MTU says management will retain the 8% of shares it currently owns, and up to 5% of the share offering will be reserved for MTU employees. "MTU's stock exchange debut will offer an opportunity to invest in a company with increasing profit-earning capacity, and one that is participating in the growth of air traffic all over the world," adds Stark.

MTU posted a 35% increase in cashflow in 2004, following a restructuring and cost-cutting programme (Flight International, 10-16 May). Earnings before interest, tax, depreciation and amortisation (EBITDA) rose 40% from €176 million ($228 million) in 2003 to €247 million in 2004.

MTU cut its debt by €200 million in 2004, and by a further €130 million during the first three months of 2005, leaving it with €55 million bank debts. It plans to use the proceeds of the offering – estimated at €800 million by analysts – to cut its debt further.

Source: Flight International