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Cablegate: Blue Lantern Pre-License Check 05-1007717: Helisota And

VZCZCXYZ0001
RR RUEHWEB

DE RUEHVL #0988/01 3071105
ZNR UUUUU ZZH
R 031105Z NOV 06
FM AMEMBASSY VILNIUS
TO RUEHC/SECSTATE WASHDC 0720
INFO RUEHPG/AMEMBASSY PRAGUE 0286
RUEHLO/AMEMBASSY LONDON 0101
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC
RUCNFB/FBI WASHINGTON DC
RUEPINS/HQ BICE INTEL WASHINGTON DC

UNCLAS VILNIUS 000988

SIPDIS

STATE FOR EUR/NB, PM/DTCC (BLUE LANTERN COORDINATOR)
LONDON FOR SINDLE
PRAGUE FOR GREANEY

SENSITIVE

SIPDIS

E.O. 12958: N/A
TAGS: ETTC KOMC LH UK EZ
SUBJECT: BLUE LANTERN PRE-LICENSE CHECK 05-1007717: HELISOTA AND
NVG PARTS

REFS: A. STATE 170863, B. TD-314/58973-03, C. 2006 BLUE LANTERN
HANDBOOK, D. VILNIUS 51, E. VILNIUS 15, F. 2005 VILNIUS 1346, G.
2004 VILNIUS 151

1. (U) This report contains business-sensitive information. Please
protect accordingly.

2. (SBU) We visited the premises of Helisota Ltd. on October 16 and
met with the company's Director General (Josif Legenzov), Production
Manager (Vaclovas Kliunka), Director of International Sales
(Anatolij Legenzov), and Director Assistant (Rita Jaceviciene).
Josif and Anatolij Legenzov gave a PowerPoint presentation on the
company and answered our questions. All of the Helisota officials
we met were helpful, cooperative and willing to give us information.
While there, we also inspected the workshop hangar where Helisota's
employees work on the helicopters. We have no objection to the
transaction described in ref A.

Helisota and Its Principals
---------------------------
3. (SBU) Helisota is a former state-owned helicopter repair facility
that was established as a private company in 1991. Anatolij
Legenzov, in a telephone conversation with us on October 19, told us
that Helisota split from Avia Baltika in 1997; the company's
PowerPoint presentation described this as an "internal
reorganization." (Note: We understand that the breakup of these
two companies was not amicable and that there is a good deal of
animosity between Josif Legenzov and Avia Baltika's President, Jurij
Borisov. We have reported on activity related to Avia Baltika
before -- see refs D, E, F, and G. End note.) Helisota is a
privately owned company that employs 180 people. Its revenue in
2004 was LTL 32 million (USD 11.8 million) and LTL 51 million (USD
18.8 million) in 2005.

4. (SBU) Josif Legenzov, at our request, provided us with a list of
Helisota's shareholders as of January 1, 2006. The list includes
the shareholders' names, the number of shares that each holds, their
state ID numbers, and their addresses. Legenzov stressed that all
of Helisota's shareholders are Lithuanian citizens, although we note
that several of the names appear to be of Russian origin.

Directors:

A) Josif Legenzov (Director General of Helisota), 1317 shares, ID #-
35010230039, T. Ivanausko g. 248, Kaunas

B) Anatolij Legenzov (Director international sales), 240 shares, ID
#- 37501140223, Gebeniu g. 77, Kaunas

C) Gintautas Zubauskas, 992 shares, ID #- 35701040100, Zilviciu g.
11, Kaunas

D) Vladimir Tomkmakov, 992 shares, ID #- 35805110293, Kursiu g.
4-30, Kaunas

Regular Shareholders:

E) Aleksej Panov, 449.5 shares, ID #- 37809260041
T. Ivanausko g. 252, Kaunas

F) Ilja Panov, 542.5 shares, ID #- 38611030056
T. Ivanausko g. 252, Kaunas

G) Jurij Sokolov, 140 shares, ID #- 34408290627
Vincu g. 3-2, Kaunas

H) Nina Kuriene, 96 shares, ID #- 45208190509
Daukanto g. 26-12, Kaunas

I) Vladimir Simcenko, 46 shares, ID #- 35607230589
Medvegalio g. 12-17, Kaunas

J) Virginija Butviliene, 5 shares, ID #- 485101603830
Radvilenu pl.. 56a-60, Kaunas

K) Linas Elijosius, 5 shares, ID #- 37206200196
Pasiles g. 55-3, Kaunas

L) Ricardas Rugevicius, 5 shares, 37109021250
Palangos g. 6-3, Kaunas


Typical Customers and Business Practices
----------------------------------------

5. (U) Helisota's main activities include performing repairs and
upgrades to Mi-8 and Mi-17 helicopters at its facility in Kaunas,
Lithuania's second-largest city. The most common upgrades include
weather radars, GPS receivers, hoisting/retrieval gear,
searchlights, armor, gun mounts, optronics, missile-defense systems,
and night-vision equipment. The company also installs VIP modules.
The company's literature notes that it also has a mobile workshop,
allowing Helisota to perform overhauls "anywhere in the world."

6. (SBU) Helisota works generally only on the airframes; it does not
repair or modify engines or gearboxes. Anatolij Legenzov told us
that the Lithuanian Directorate of Civil Aviation has certified
Helisota for the overhaul and modification of military helicopters.
In 2005, Helisota became a registered NATO supplier. Legenzov also
told us that four helicopters currently used by ISAF in Afghanistan
received upgrades at Helisota's facility.

7. (SBU) Josif Legenzov told us that Helisota has 20-25 customers
per year, on average. He said that approximately 90 percent of
these customers were governments and the remaining 10 percent were
private citizens or businesses. Legenzov also said that Helisota is
registered only in Lithuania and has one subsidiary which is also
registered only in Lithuania.

8. (SBU) Legenzov listed the following government customers:
Georgia (upgrades for helicopters for its border protection service,
financed by the U.S. Department of Homeland Security, and two
different VIP upgrades); Latvia (Bell-206 upgrade for border
service); Estonia (Mi-8T upgrades for border service); Lithuania
(EC-120 Colibri upgrade for border service); Sri Lankan Air Force
(overhaul of Mi-8MTVs and Mi-171s); Bangladeshi Air Force (overhaul
and upgrades to Mi-8MTVs); Columbian Army Aviation (Mi-8MTV restored
after crash landing); and Pakistani Antinarcotics Force (Mi-8MTVs
upgraded and overhauled). (Note: Glancing through the company's
Guest Book, we also noticed that representatives from the Government
of Congo had visited Helisota, but it was not clear if they were
from Congo-Kinshasa or Congo-Brazzaville. End Note.)

9. (SBU) Josif Legenzov emphasized that Helisota would not do
business with any "questionable" countries that are on UN watch
lists or under other arms embargoes. He said that he had received
offers from both Sudan and China, but had rejected them.

Familiarity with U.S. Munitions List requirements:
--------------------------------------------- -----

10. (SBU) Anatolij Legenzov said that Helisota was familiar with
U.S. Munitions List (USML) requirements and that his company had
been working with Western export controls since 1998. He also said
that Helisota began working with night-vision equipment in 2001.
All members of the briefing said they were aware that Helisota was
not allowed to make any changes to the destination of USML articles
without the approval of the USG.

British MOD order:
------------------

11. (SBU) Anatolij Legenzov confirmed the order by the British
Ministry of Defense described in ref A. He said that Helisota will
mount armor plating to the Mi-8MTV1 helicopter, add missile warning
and defense technology, and install night-vision equipment. He
confirmed that Helisota will have possession of the night-vision
equipment, saying that Helisota will store this equipment in a
separate, locked storage room, which he showed us. He said that the
GOL had inspected and licensed this facility for the storage of
controlled military equipment.

12. (SBU) We observed that a two-meter fence surrounded the entire
Helisota compound, and that a remotely operated gate controlled
access. Anatolij Legenzov said that Helisota employs armed guards
to secure the company's compound and that the company also uses
guard dogs to patrol the compound after business hours.

13. (U) Helisota contact information:
Helisota Ltd
5, Europos Ave

LT-46329 Kaunas
Lithuania
tel: +370 37 421637, 421329
fax: +370 37 420420
e-mail: helisota@helisota.lt
website: www.helisota.lt

CLOUD

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