Russia’s Softline Slips in Trading Debut After $400 Million IPO
Softline Holding Plc, an IT services and cybersecurity provider founded by Russian businessman Igor Borovikov, dipped as shares started trading in London, after pricing its initial public offering at the bottom end of a marketed range.
The company sold $400 million of new shares at $7.50 apiece, valuing Softline at about $1.5 billion, it said in a statement Wednesday.
The IPO follows a recent period of turbulence for global technology stocks amid rising bond yields and China’s crackdown on the sector.
“We are not going to participate in the IPO this time due to high uncertainty regarding the way the market views Russian tech stories,” Konstantin Asaturov, a fund manager at Sistema Capital in Moscow, said. He added they may consider buying the stock after expected initial fluctuations when it starts trading.
Softline shares fell 1.5% to $7.39 at 9:48 a.m. on Wednesday in London.
Softline’s share sale comes after Renaissance Insurance Group JSC, Russia’s largest online policy provider, went public last week amid renewed interest in local listings, tracking a global trend. Carsharing service Delimobil and real-estate platform Cian have also filed to sell shares. The first half this year was Russia’s busiest for stock offerings since before the annexation of Crimea.
Borovikov founded Softline in Moscow as software reseller in 1993 with 10 employees. The company initially sold Microsoft solutions, and then expanded to other product lines and regions. Today, it employs around 6,000 people in more than 50 countries.
Softline had annual sales of $1.79 billion and $52 million in adjusted earnings before interest, taxes, depreciation and amortization in the year ended March 31, according to the IPO prospectus.
Shareholders, including Borovikov’s Softline Group Inc., Da Vinci Capital and Zubr Capital, have an option to sell additional general depository receipts representing as much as 4.4% of the total number of shares.
Credit Suisse Group AG, JPMorgan Chase & Co. and VTB Capital acted as joint global coordinators and joint bookrunners. Alfa Capital Markets, Citigroup Inc., Gazprombank JSC and Sberbank CIB also helped organize the sale.
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