Leonardo Helicopters: Mystery surrounds the future of the Somerset company in Moscow amid close ties with the Russian state
Leonardo Helicopters has “suspended operations” in Russia amid its close ties to Russian state-backed corporations and oligarchs. However, the company has not disclosed whether it will permanently sever ties with the Kremlin as Western political figures accuse the Russian government of “war crimes” and “genocide” in Ukraine.
The Italian-based multinational aerospace and defense company, which employs more than 3,000 workers at a factory in the heart of Yeovil, has deep-rooted ongoing relationships with Russian government-controlled companies. Leonardo has long-standing partnerships with Rosneft, a Russian state-owned energy giant, and Rostec, a Russian state-owned defense conglomerate, both run by oligarchs close to Russian President Vladimir Putin and who have been the target of heavy penalties. from UK, USA and EU.
Rostec produces much of the military equipment used by Russian troops and is headed by oligarch Sergey Chemezov, considered one of Putin’s closest aides. Rosneft, one of the world’s largest oil producers, is led by oligarch CEO Igor Sechin.
READ MORE: Leonardo Helicopters: Somerset-based firm’s deep ties to Russian state revealed
Leonardo currently has a 40% stake in a large factory called HeliVert in Tomilino, near Moscow, which produces AgustaWestland helicopters for the Russian market. Rosneft and Rostec subsidiary Russian Helicopters also own a 30% stake in the company.
It appears operations have now come to a halt at this plant, but a spokesman for Leonardo had no comment when approached by Somerset Live about whether the company would leave the HeliVert project for good. If Leonardo leaves the country for good, he will probably have to hand over all his Russian assets to the Russian state, which has revealed its intention to “nationalize the ownership of Western companies that leave the country”.
According to Italian newspaper Il Fatto Quotidiano, Leonardo said that “the activities in Russia, now at a standstill, remain subject to the evolution of the scenario and the company acts in accordance with the provisions defined by the governments of its domestic markets”. Another Italian news source, Submarinereports that the agreements surrounding HeliVert are “today, even with sanctions… difficult to terminate”.
The cloud of mystery surrounding Leonardo’s dealings with the Russian state lingers as the company recently celebrated a £360 million deal with the UK Ministry of Defense to provide helicopter support and training Wildcat. The company said the exceptional agreement will provide “continuity of employment” for roles at Yeovil in maintenance, security and training roles.
On Tuesday, March 8, a webpage regarding Leonardo’s relations with Russia disappeared from the company’s website. An archived version of this web page remains, and You can see it here (this archived webpage may take a few moments to load).
When approached by Somerset Live regarding Leonardo’s operations in Russia, a company spokesman said: “Leonardo’s UK-based business, including Leonardo’s helicopter site in Yeovil, does not trade with Russia. Leonardo Helicopters’ Italian business related to Russia, all of which involved civilian helicopters, have been suspended. No components or spare parts are being sent to Russia. Company personnel have been recalled to Italy.”
According to Leonardo’s 2021 financial results, there is no distinction between “Leonardo’s UK-based activities” and “Leonardo Helicopters’ “Italian-based business activities”. Both operations are part of the same public company, which trades in Milan under the symbol LDO.
LDO’s stock price rose more than 59% in the month after the Russian army began to invade Ukraine. Leonardo’s main shareholder is the Italian Ministry of Economy and Finance, which holds a 30.2% stake in the company.
Leonardo’s deep ties to the Kremlin and the oligarchs
Leonardo’s presence in Russia centers on HeliVert, its joint venture with Kremlin-controlled giants Rosneft and Rostec. Leonardo currently holds a 40% stake in the plant, while Russian Helicopters and Rosneft also hold a 30% stake in the company.
Russian Helicopters is controlled by Rostec, a Russian state-controlled conglomerate that is the country’s largest defense company. Rostec produces much of the military equipment used by Russian troops, including everything from armored fighting vehicles to Kalashnikov rifles and night vision goggles.
Rosneft is also Russian state-owned, and a superyacht owned by its oligarch CEO Igor Sechin, another longtime Putin ally, was seized by French authorities near Marseilles in March. Sechin has been dubbed ‘Putin’s Darth Vader’ and ‘the scariest man alive’ by Russian media, while a leaked US Embassy cable described him as ‘the Gray Cardinal of the Kremlin’ .
The European Union recently said in a document that Sechin “is in daily contact with the Russian president.” The document also stated that Sechin “is considered one of the most powerful members of Russia’s political elite”.
Since the start of the invasion of Ukraine by Russian forces, the western world has moved away from Rostec and Rosneft, as they are both controlled and fully supported by the Kremlin. Rostec was named specifically by name in a UK government press release as a “key target” for punitive sanctions, while BP said it would offload a $14 billion stake in Rosneft.
According to its website, HeliVert is a final assembly plant for AW139 helicopters, and also provides maintenance for AW109, AW139 and AW189 helicopters, its main objective being to “meet the needs of Russian markets”. As recently as December 2021, HeliVert supplied four AW139 helicopters to Rostec.
The AW139 is a 15-seat mid-size twin-engine helicopter. It costs between $5.5 million and $9.652 million, according to HeliValue data taken in the spring of 2021.
According to a 2016 Rostec press release, Russian President Vladimir Putin was present to witness a “trilateral strategic partnership development agreement” signed by Leonardo CEO Mauro Moretti, Rosneft CEO Igor Sechin and the CEO of Russian Helicopters, Alexander Mikheyev. Historical reports indicate that the agreement involved contracts for the supply of 160 Leonardo helicopters to Rosneft from 2016 to 2025, but it is unclear whether those initial contracts are still fully in place.
Local MP calls for ‘total ban on dealing with Russia’
When the Russian military’s invasion of Ukraine began, MK Yeovil Marcus Fysh wrote on Twitter: “Sanctions must include complete bans on dealing with Russia – world affairs may need to be restructured in result”.
Mr Fysh also tweeted: “A rapid, unified and comprehensive response must make Putin’s Russia and all who support him pay for their actions.”
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