. Last Updated: 07/27/2016

Irkut Cleared to Sell ADRs

Russia's financial markets watchdog has granted warplane maker Irkut approval to place as much as 40 percent of its stock on a foreign bourse.

But the maker of Sukhoi 30-MKI fighter jets will be unable to place more than 25 percent due to state restrictions on foreign ownership of defense or strategic companies.

There are moves in parliament to raise that threshold. But analysts say it may take a while before the government, which has strengthened control over strategic sectors since President Vladimir Putin's re-election in March, approves the measure.

An Irkut official was quoted by Vedomosti on Tuesday as saying an American Depositary Receipt issue was unlikely before 2005. Irkut officials were not immediately available for comment.

Irkut, which has said it wants to sell a stake to aerospace giant EADS, has yet to decide on which stock exchange to place shares.

Vedomosti, however, reported that the company had already filed to the U.S. Securities and Exchange Commission for approval.

Irkut -- Russia's only listed big defense firm -- said in September it wanted to convert its entire 25 percent free float into first-level ADRs.

Russia's aerospace sector is slowly recovering from a post-Soviet slump, but production levels are nowhere near that of Western rivals.

The government wants to unite all domestic warplane makers into one big holding company and possibly sell a minority stake in it to a foreign investor.

(Reuters, MT)