Russian tycoon Deripaska's En+ wants to raise $2 bln in listing - sources
26/04/2017 15:45
By Dasha Afanasieva and Olga Popova
LONDON/MOSCOW, April 26 (Reuters) - En+ Group, which manages
Russian tycoon Oleg Deripaska's aluminium and hydro power
businesses, plans to raise $2 billion in an initial public
offering (IPO) in London and Moscow, sources familiar with the
deal said.
A flotation of 20 to 25 pct of En+ split between the two
capitals would value the company at up to $10 billion, a
valuation some industry sources have said is too ambitious.
"You have a tough valuation in market conditions which could
still be tricky and a shareholder who does not have a capital
markets track record," one of the sources said. "If you compare
it to other conglomerates like Sistema AFKS.MM who have a
mishmash of assets, it's a high valuation."
En+ declined to comment.
En+ owns assets in metals, energy and coal, including a 48
percent stake in Rusal 0486.HK , a Hong Kong-listed Russian
aluminium producer, which is a big consumer of hydroelectricity
produced by En+'s power companies.
Sistema's businesses include stakes in mobile telecoms
network operator MTS MBT.N , a toy retailer and agriculture
assets.
Another source said some investors wanted En+ to apply a
discount to the sum of its assets, which is common in valuating
a holding company. However, En+ does not see itself as a holding
company, the source said.
It reported 2016 adjusted core earnings of $2.3 billion this
month, in its first public disclosure of financial results in
two years.
A source who attended meetings between En+ management and
analysts from the organisers of the listing told Reuters the
listing, aimed at reducing the company's debt, was expected to
take place in late June, depending on market conditions.
But it could be delayed until after the summer, or postponed
indefinitely if market valuations miss expectations, the source
said. The company hopes to attract anchor investors, with a
focus on long-term investors, for half of the placement.
U.S. banks Citi and JP Morgan along with Russia's Sberbank
CIB and VTB Capital are among arrangers of the IPO, sources told
Reuters in February. urn:newsml:reuters.com:*:nR4N1D301R
En+'s debut on the London Stock Exchange could mark the
return of Russian listings in the capital, after a slump in
commodity prices and Western sanctions brought most deal-making
to a standstill.
The country's biggest gold producer Polyus PLZL.MM is also
considering a secondary share offering in London. urn:newsml:reuters.com:*:nL8N1HM0QF
But the LSE faces stiff competition from Moscow's main
exchange, which claims to have access to the world's biggest
investors.
Russia's biggest IPO so far this year, children's retail
chain Detsky Mir DSKY.MM , shunned the London market and opted
for a Moscow IPO, attracting a significant proportion of
international investors including Columbia Threadneedle
Investments and Deutsche Asset Management Investment.
urn:newsml:reuters.com:*:nR4N19705E
(Reporting by Dasha Afanasieva, Olga Popova and Polina Devitt;
Writing by Dasha Afanasieva; Editing by Susan Thomas)
((dasha.afanasieva@tr.com; +44020 7542 0214;))
Keywords: EN+ IPO/