Russia’s Segezha Group Raises $400 Million in Moscow IPO
(Bloomberg) -- Russian wood, paper and packaging producer Segezha Group sold 30 billion rubles ($400 million) of new shares in an initial public offering closer to the lower end of its price range.
The group sold 3.75 billion newly issued shares, representing 31.4% of its current share capital, at 8 rubles apiece in Moscow, Segezha, owned by billionaire Vladimir Evtushenkov’s Sistema PJSFC, said in a statement. The sale values the company at 125.5 billion rubles on a post-money basis.
“It might become an encouraging example for Russian corporates waiting in the queue to float,” Alina Sychova, head of capital markets origination for Sova Capital, said by email. While Sistema’s pricing expectations may have initially been higher, the placement’s success is a positive sign, she said.
Segezha’s deal shows the IPO market is still open after rising geopolitical tensions and a new round of U.S. sanctions weakened appetite for Russian assets. The owners of GV Gold PJSC, a miner backed by BlackRock Inc., put its share sale on hold indefinitely as the market weakened at the end of March, while Russian miner Nord Gold SE has selected banks and is planning an IPO in London later this year.
Demand was high and came from different types of investors from all over the world, according to Fedor Tregubenko, head of UBS Group AG in Russia, which helped organize the deal. The company was valued at a premium to the metals and mining sector in Russia, he said.
The IPO book was two times oversubscribed, with around half of demand coming from foreign investors, according to the state-run RIA Novosti news agency. The shares were trading down 0.9% at 7.93 rubles as of 1:03 p.m. in Moscow.
Sistema has granted Renaissance Capital an over-allotment option to purchase shares in an amount equivalent to as much as 15% of the total number of new shares. The option is exercisable for a period of 30 days from April 28.
JPMorgan Chase & Co, VTB Capital Plc, Alfa Capital Markets Ltd, Gazprombank JSC, BofA Securities, Renaissance Capital and UBS helped organize the sale, making Segezha Russia’s first vertically integrated forestry company to be publicly traded.
“It’s a new sector, an interesting issuer and a growth story,” TKB Investment Partners’ Chief Investment Officer Vladimir Tsuprov, who took part in the deal, said by message from St. Petersburg.
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