VSMPO-Avisma could go public in 2008-2009

Russian VSMPO-Avisma could launch an IPO in late 2008, chairman of VSMPO-Avisma’s BoD and Head of Rosoboronexport (the company’s largest shareholder) Sergei Chemizov made this statement yesterday. It is noteworthy that VSMPO-Avisma has already announced its intention to go public on numerous occasions, although the plans fell through due to the arrival of a new owner and a major corporate shakeup.

The development failed to cut ice with VSMPO-Avisma’s investors and the company’s stock valuations remain flat for the time being, which shows that the market is wary of forward-looking statements by Avisma’s top managers. Be that as it may, analitics advise investors, both speculative-minded and those with a long-term investment horizon, to keep an eye on this stock.

In the first place, VSMPO-Avisma could post sales of $1.5 bln as early as next year if titanium prices stay high; in the second place, the company is likely to boost its production capacities 50% and output to 32,000 t.

The company’s investments will total $1 bln by 2012 which will be enough to entirely upgrade its production facilities and improve manufacturing efficiency which, in turn, is likely to translate into stronger cash streams.

And last but not least, VSMPO-Avisma holds leading positions on the international market and is a key supplier of titanium products to the world’s largest aircraft builders Boeing and Airbus.

According to Antanta Capital’s estimates, the fair price of VSMPO-Avisma’s shares is $330.

The only constraint on the company’s share price is that its FY05-FY06 IAS financial statements are not currently available to the general public.