Deripaska's En+ Group targets US$8.5bil valuation in IPO
MOSCOW: Russian billionaire Oleg Deripaska’s En+ Group Plc announced a price range for its initial public offering, indicating a valuation as high as US$8.5bil before it issues new shares.
En+ wants to sell shares and global depositary receipts in Moscow and London at US$14 to US$17 apiece, the company said in a statement yesterday.
This implies a pre-IPO value between US$7bil and US$8.5bil. The offering is expected to represent between 15.8% and 18.8% of the issued share capital on a fully diluted basis, excluding the over-allotment option.
“The price range seems quite fair and gives some upside for growth,” Oleg Petropavlovskiy, an analyst at BCS Global Markets, said by phone.
“It is unlikely to sell shares at the top end of the range, but has all chances to be in the middle of the range.”
BCS values En+ at US$10bil on a post-IPO basis and considers any valuation below US$8.5bil as attractive, he said.
The company’s main assets are a 48% stake in United Co. Rusal, the biggest aluminum producer outside China, and hydropower stations in Siberia. If successful, it will be the biggest Russian IPO since 2013.
En+ seeks to raise US$1bil in the deal by selling new shares, and in addition Deripaska will sell US$500mil of stock to China’s AnAn Group, which is acting as a cornerstone investor.
The Russian Direct Investment Fund is eyeing shares in the IPO, sources said, asking not to be identified as the information isn’t public.
Representatives for En+ and RDIF declined to comment. Another potential investor is Qatar’s sovereign wealth fund, the Financial Times reported on Sunday, citing sources.
Separately, Glencore Plc last week agreed to swap its 8.75% stake in Rusal for En+ shares after the IPO. That would increase En+’s stake in Rusal to 57% from 48%.
The IPO is expected to be closed in November.
The book-building process and investor roadshow started yesterday. The company intends to use the primary proceeds from the offering to repay a portion of its debt, En+ said.