Oppenheimer shareholding to be cut dramatically

Published: 5/15/2000

Although the US institutional investor Oppenheimer holds 30% in the Progress Aviation Plant in Arsenyevo in the Russian Far East, the plant is still entitled to produce military products, despite the law passed in 1998 that prohibits any plant with more than a 25% foreign shareholding from producing military products. The state owns 50% plus one share in the company. The agreement has been reached on the basis that Progress reduces its foreign shareholding through a buyout of Oppenheimer's shares by Russian entities, with the goal of bringing foreign holdings overall back to 8%. This will allow the plant to continue to produce the Moskit anti-ship missile and helicopters including the Ka-50. At present the plant is producing Moskit systems for China and has recently completed orders for Vietnam and Algeria. For Oppenheimer, trapped by the complete collapse of the market in defence stocks over the last two years, the agreement may not prove be too onerous, as they have been actively seeking to sell their holdings in the industry. The price of the trade however, which has not been revealed, is another matter. Reports at the end of 1999, when the make up of the ownership of the plant was first publicly discussed, suggested that the potential Russian buyer of the stock could be Vladivostok-based company Radiopribor, an electronics producer, which was interested in getting closer to the helicopter and missile producer. Recent reports have not identified the possible buyers.

Article ID: 1770