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Russia’s Globaltrans seeks up to $509 mln in IPO

Russia’s largest privately owned freight rail operator, expects to raise between $390 million and $509 million floating a 29% stake on the London Stock Exchange, the company said.

Globaltrans on Wednesday set a price range of $11.50-$15.00 per Global Depositary Receipt (GDR) for its initial public offering, implying a market capitalization of $1.35 billion to $1.75 billion. “Following the IPO, we intend to invest further in our rolling stock in order to expand our business into other high-margin segments, such as building materials,” Globaltrans CEO Sergei Maltsev said in a statement.

Globaltrans is hoping to attract investors drawn by a Russian economy growing in excess of 7% annually. President Vladimir Putin has pledged $1 trillion in investment in the modernization of Russia’s industry and infrastructure. Maltsev said the company already counted several large metals and oil firms among its customers, including Rosneft, LUKoil, Evraz Group, Severstal and Magnitogorsk Iron and Steel Works. The offering will comprise up to 33.9 million GDRs representing newly issued shares and GDRs being sold by the two owners of Globaltrans: Envesta Investment Ltd, which represents its management, and Transportation Investment Holding Ltd.

Envesta has also granted joint bookrunners Deutsche Bank and Morgan Stanley an over-allotment option to purchase additional GDRs at the offer price, exercisable within 30 days of the announcement of the offer price. Deutsche Bank is also global coordinator of the IPO. The company has not set a date for the offering. (Reuters)