Russian Technologies (RT) is negotiating on selling 45% of VSMPO-Avisma shares owned by RT (70% of the total volume of shares of the Russia’s only titan manufacturer – VSMPO-Avisma Corporation), Kommersant reports.

Russian Technologies State Corporation, which owns 70,42% of VSMPO-Avisma shares, is considering the possibility of decreasing its share to blocking shares. As reported by sources, familiar with RT’s plans, the Corporation intends to sell 45,42% of its VSMPO-Avisma shares, owned by subsidiaries of Rosoboronexport (owned through offshores: Cador Enterprises and Jivanta Ventures). The state corporation will only have the blocking shares (owned directly by RT) after the sale.

According to the newspaper’s sources, RT wants to sell 45,42% of its VSMPO shares, because the securities have been acquired using borrowed funds and now they are pledged to VTB and Sberbank and the corporation’s budget does not allow maintaining these credits after the first half of 2012. According to the sources, Russian Technologies have a debt of $790 million owed to the banks and the maturity expires in March-April 2014.

CEO of VSMPO-Avisma, Mikhail Voevodin, confirmed that Russian Technologies have submitted a proposal to the Ministry of Economics on selling the block of VSMPO shares and now they are elaborating the corresponding letter. "Thisisnotatechnicaltrade. There are few bidders and all of them are Russian companies", — Voevodin said, declining any comments on names of the bidders. He noted that this refers to private investors, VEB, VTB or Sberbank are not on the list. "It will depend on the model of the deal, approved by the government: if the state corporation is to keep 51% of VSMPO shares, then one of the direct investment funds may become the investor; if RT keeps only blocking shares – then the company will have a new strategic investor. Anyway, VSMPO shares will be sold in accordance with the current market quotation", — he assured.

Kommersant notes that the state corporation wants to sell the VSMPO shares at the price not lower than the cost of recoupment of this block as of the end of first half of 2012. It is about $179 per share, which approximately corresponds to the current market quotation". Following the results of yesterday trading at MICEX-RTS the weighted average cost of VSMPO share was 5,150 rubles (about $174,8), but the cost of one VSMPO share was 5,470 rubles (almost $186,5) last week. The corporation’s current market capitalization is $2,1 billion, thus the value of 45% of its shares is $950 million.