Russia's Russneft IPO raises about $500mn for owners

Russia's Russneft IPO raises about $500mn for owners
Russneft is Russia's seventh-largest oil producer in terms of volume. / Photo: CC
By bne IntelliNews November 25, 2016

Russia's private oil company Russneft priced the IPO of 20% of its shares at RUB550 per share, valuing the company at RUB161.8bn ($2.5bn). The Belyrian Holding controlled by Mikhail Gutseriev and his family will thus pocket RUB32.4bn or about $500mn from the placement.

The IPO, organised by local players VTB Capital, Sberbank CIB, Aton Capital and BCS Equity, and lead managed by Binbank, also controlled by Gutseriev, was carried out at the lower end of the price guidance of RUB540-600.

Russneft is Russia's seventh-largest oil producer in terms of volume, with 25% of the company held by oil trader Glencore, which did not participate in the IPO. 

According to the Financial Times, the deal values Glencore’s stake in Russneft at about $830mn, well above the $685mn at which it was valued in the company’s most recent annual report. Glencore swapped $984mn of loans to Russneft and equity stakes in Russneft subsidiaries for its stake in the Russian oil company last year.

Mikhail Gutseriev (net worth estimated by Forbes at $6.5bn) told the Financial Times that the offering was oversubscribed by 30%, with over 2,000 retail bids. The Gutserievs held 67% in Russneft prior to the IPO.

During the IPO on the Moscow Exchange, Russneft scaled back its valuation to $2.2bn-2.7bn from the previous $4.5bn-5.0bn. The company also has debt of around $1.3bn. 

Analysts surveyed by Interfax at the beginning on November believed the timing for the IPO to be favourable, as investors are looking for medium-sized oil companies to buy into, now that Bashneft shares would no longer be available after the recently announced minority buyback by Rosneft.

News

Dismiss