May 12th, 2011

Another IPO bites the dust

Russia Helicopters is the latest Russian IPO to be postponed because of political risk. Unable to release required details about its military contracts, Russia Helicopters joins four other IPOs this year that failed to close. Yandex is the most ambitious Russian IPO since it chooses to list on NASDAQ and must follow US securities law. Its $1 billion IPO is expected to be completed later this year.

The trend in increasing political risk for Russian IPOs is on the rise and the Russian government becomes more entwined with businesses in Russia. Today, Prime Minister Vladimir Putin’s cabinet approved the appointment of deputy premier Sergei Ivanov’s son to replace a first deputy prime minister to head the supervisory board at Russian Agricultural Bank. With political appointments at the helm, it may be increasingly difficult for Russian companies to access international capital markets as investors seek returns with risk.

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