Correction to This Article
ยท A May 30 Business article about McLean-based International Launch Services incorrectly said ILS helps the Russian-owned Khrunichev State Research and Production Space Center gain approval from the U.S. State Department to export satellites and other components manufactured here for use abroad. ILS assists satellite operators and manufacturers in obtaining that approval.

Russian Firm Buys McLean's International Launch

Sirius Satellite Radio and DirecTV are among companies that have used rocket services.
Sirius Satellite Radio and DirecTV are among companies that have used rocket services. (Associated Press)
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By Alejandro Lazo
Washington Post Staff Writer
Friday, May 30, 2008

A Russian space hardware manufacturer is now the majority owner of International Launch Services, a McLean company formed 15 years ago to help market and manage commercial rocket launches for the Russian firm.

Khrunichev State Research and Production Space Center, run by the Russian government, now owns 83 percent of ILS after purchasing shares from Space Transport, based in the British Virgin Islands. The transaction puts all of ILS in Russian hands, with Moscow-based S.P. Korolev Rocket and Space Corp. Energia, a semiautonomous company, owning a 17 percent stake.

Space Transport bought Lockheed Martin's 51 percent stake in ILS in 2006. Space Transport was created with the sole purpose of holding an interest in ILS, and its chairman is Mario Lemme, a longtime adviser to ILS who served on the company's board for three years.

Khrunichev, based in Moscow, produces the Proton rocket, which is launched from the Baikonur Cosmodrome in Kazakhstan, and is developing another rocket, the Angara.

The new ownership of ILS "means that any profit from the commercial use of Proton stays in Russia," said John M. Logsdon, director of George Washington University's Space Policy Institute.

ILS holds the exclusive rights worldwide to market and sell the services of the Proton and Angara. The company has about 60 employees in McLean and has a backlog of 22 rocket orders totaling about $2 billion. Customers have included Sirius Satellite Radio and DirecTV, ILS said.

The company also helps Khrunichev gain approval from the U.S. State Department to export satellites and other components manufactured here for use abroad. ILS will remain based in McLean.

ILS competes with launch companies such as Arianespace, of Evry, France; and Sea Launch, a Long Beach, Calif., joint venture between Boeing and a Ukrainian rocket company.

John Pike, director of military think tank GlobalSecurity.org, said that Khrunichev has become increasingly focused on work for the Russian military in recent years and that the move to take control of ILS could be a way of pulling back from the commercial market.

"Khrunichev plants only have finite production capacity for rockets, and any one that is sold in the international marketplace is not going to be sold to Russia's military," Pike said. "What you are seeing with Russia, generally, is that there are a lot of international commercial deals that they did back in the '90s that they are pulling back on."

Financial details of the deal were not disclosed by ILS. Spokeswoman Fran Slimmer said the transaction required approval from the Committee on Foreign Investment in the United States, a multi-agency group chaired by the Treasury Department. A spokesman for Treasury said the law prohibits him from commenting on whether the committee had reviewed the transaction.


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