RUSSIAN coal giant SUEK is planning a $1bn (£623m) float in London by the end of June, City A.M. has learned.
The float is being shopped around some of the world’s biggest investors in commodities during pre-marketing meetings in London, with BlackRock and Renaissance Capital having been approached.
The deal, which is being led by Chris Byrne at Credit Suisse, is set to value Russia’s biggest producer of thermal coal at $5-$8bn. SUEK has been trying to float for some time, with a London initial public offering (IPO) originally slated for 2008, then June last year and then postponed until 2011.
There is speculation that the deal could again be pushed back due to ongoing market uncertainty, but with bulk commodities currently seen as a hot proposition, part-owner Sergei Popov is keen to take advantage of high prices for resources to scale down his ownership share and concentrate on other businesses.
Investors say they would welcome another major coal player on the market but there will be a question of whether the miner’s owners are willing to offer an “oligarch discount”, as one investor in the sector put it, for the risk of buying shares in a company that is 50 per cent owned by Russian tycoons Sergei Popov and Adrei Melnichenko. Such a discount should be around 20 per cent, said the investor.
Several Russian floats planned for this year have failed due to overly high value expectations by owners, while others, such as Rusal, saw their share price drop sharply after going public, although it has since risen above its float price.
ADVISERS: SUEK FLOAT
CHRIS Byrne is leading the effort to get SUEK on the London Stock Exchange – no mean feat given the failure of its previous attempts.
Byrne has been with Credit Suisse since 2006 when he moved from JP Morgan Cazenove to focus on UK?industrial and technology clients.
Since moving to Credit Suisse, he has worked alongside Nicholas Koemtzopoulos and Laurent Charbonnier on the attempted float of Nord Gold, which was cancelled in January.
And last year, he was put on the account for UK?engineering firm Bodycote alongside Execution Noble.
He also advised on the £12.8bn rights issue for Intermediate Capital Group in 2009, where he was working with Indy Bhattacharyya and Alex Phillips. At JP Morgan Cazenove his clients included property investment firm Capital & Regional, defence and technology company QinetiQ, and electronics firm Laird Group.
Credit Suisse is also an adviser on Glencore’s potential float. The bank declined to comment yesterday.