Russian Helicopters, the state-owned holding company that makes Mil and Kamov civil and military rotorcraft, has indefinitely suspended an initial public offering scheduled for 11 May in which it expected to raise $500 million in London and Moscow.

The company suspended the IPO after it had failed to receive enough bids due to the complex market situation and will probably give up its IPO plans for this year, according to media reports citing sources close to the offering.

The company's books were due to close the day before the offering, but its investor roadshow overlapped with that of commodity trader Glencore's London and Hong Kong listing, which saw investors put in orders for all $11 billion worth of shares on the first day.

"There is a lot of attention on Glencore, and getting attention on small-mid cap IPOs right now is difficult. It is difficult to get people to care," said one equity capital markets banker.

"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," said Andrei Reus, chief executive of Russian Helicopters' core shareholder Oboronprom, the state defence industry holding.

"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," Reus said.

The company intended to hold the IPO in May by placing ordinary shares held by Oboronprom, and new shares represented by global depositary receipts (GDR), with one GDR representing one ordinary share. The price guidance for GDRs was set at $19-25 while the company was provisionally valued at $1.805-2.375 billion.

The company said earlier it intended to use the proceeds from the offering to repay debt and to buy back shares from minority shareholders.

Source: Flight International