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. Last Updated: 07/27/2016

Interros Sheds Last of Its Defense Assets

Vladimir Potanin's Interros has divested the last of its defense assets, confirming Tuesday that it has sold its stake in air defense systems-maker Oboronitelniye Sistemy to a company said to be affiliated with Rosoboronexport.

Interros said it has sold 50 percent in Oboronitelniye Sistemy-Invest, the defense company's largest shareholder, to a company called Oboronprom for an unspecified sum.

"The deal has been concluded and is in line with our strategy to divest assets in the military industrial complex," Interros spokesman Mikhail Barkovets said by telephone.

In 2001, Interros sold its stake in the New Programs and Concepts holding, which includes a number of defense assets, among them the Sukhoi design bureau and the Severnaya Verf shipyard in St. Petersburg.

Oboronitelniye Sistemy, or Defense Systems, is known for its production of upgraded S-125 Pechora 2M air defense systems, which it began delivering to Egypt earlier this year. Over the last decade, it has also sold longer-range S-300PMU systems to China and Cyprus, Marat Kenzhetayev, an expert with Moscow's Center for Arms Control.

Oboronitelniye Sistemy spokesman Igor Meschan refused to comment on the deal.

A source familiar with the situation confirmed that the shares ended up in the hands of Oboronprom, which has connections with state-controlled arms selling agency Rosoboronexport.

"This company is used to accumulate shares in defense companies," he said.

Rosoboronexport already has four of its officials on Oboronitelniye Sistemy's board of directors, including chief executive Andrei Belyaninov.

Reached by phone, Rosoboronexport spokesman Alexander Smelyakov would not confirm the deal.

Oboronprom could not be reached for comment Tuesday.

Smelyakov said however that Rosoboronexport's policy is to have representation on defense companies' boards and hold equity stakes in them as a way to ensure implementation of export contracts.