OAO Sitronics, the technology unit of Vladimir Yevtushenkov's AFK Sistema, raised $402 mln in an initial public offering, the fifth IPO of a unit of the Russian billionaire's holding company.
The shares were sold for 24 cents each, the bottom of the offered range, Sitronics said in a statement today. The company had sought as much as 30 cents a share. Underwriters were also granted an over-allotment option of 125 million shares in the form of global depositary receipts they can exercise over 30 days, which would increase the sale proceeds to $432 million. The sale values Moscow-based Sitronics, which makes consumer electronics, telecommunications equipment and develops software, at about $2.3 billion. The company, also a maker of Moscow subway tickets and microchips for missile systems, has offices in 25 countries and manufacturing facilities in Prague and Athens.
„As it is difficult to forecast the company's business, investors must have demanded a discount,” said Nadezhda Goloubeva, a telecommunications analyst with Aton Capital Group in Moscow. Judging by the $2.3 billion valuation, „the placement is quite successful,” Goloubeva said. Sitronics builds its business mainly on orders in a highly competitive market, which makes their future uncertain, Goloubeva said. „They have great opportunities and great risks.” The stock will trade in London in the form of GDRs at $12. The ordinary shares will trade on the RTS and Micex exchanges in Moscow. Sitronics' free float will amount to about 17.5% of the company's issued stock. Sistema shares rose 1.5% to 1,330 rubles at 10:51 a.m. Moscow time.
The 1.67 billion share offering includes 1.5 billion new shares placed in the form of GDRs and 125 million ordinary shares placed by manages including Sistema CEO Alexander Goncharuk and Gennady Krasnikov, a Sitronics executive. Goncharuk raised $20.4 million by selling 85 million shares and Krasnikov will get $9.1 million by selling 38 million shares. Sitronics will receive net proceeds of $352.6 million should the underwriters choose not to exercise the over-allotment option, the company said. The company has said it plans to spend half of proceeds on acquisitions and the rest to pay off debt and for other company purposes. Goldman Sachs Group Inc., Credit Suisse Group, Renaissance Capital Finance Ltd. and HSBC Holdings Plc that managed the sale will get about $14.1 million in underwriting fees.
The IPO value is lower than the $2.5 billion Sistema said it expected last year. Credit Suisse Group and Renaissance Capital valued the company at $2 billion to $2.4 billion and between $2.2 billion and $2.6 billion, respectively, according to research reports by their analysts. Russian companies are raising record amounts of money in stock and bond sales as they seek foreign acquisitions amid a ninth year of economic expansion. Sitronics is among about 30 Russian companies that may raise $20 billion this year in IPOs, according to Deutsche Bank AG's Moscow unit. An additional $15 billion may come from as many as 30 secondary offerings. (Bloomberg)