13 October 2011
Motor Sich (UX: MSICH UK, BUY) announced plans to invest more than USD 10 mln in the Konotop plant Aviakon to start modernization of Mi-2 and Mi-8 helicopters at the facility, Interfax reported yesterday. Motor Sich plans to finance the modernization with its own cash. The plant plans to produce 18 helicopters in 2012 and to increase annual output to 40 helicopters in 2014-2015. Vitaly Gorovoy: We estimate Motor Sich’s revenues from sales of helicopter engines at USD 4.1 bln in 2011-2020E (37.6% of total revenues). Because the modernization program has not started yet, we did not include cash flow from this project in our DCF model. We estimate additional revenues from modernization of one Mi-2 could amount to USD 850,000, and for each Mi-8 – USD 5 mln.