Kcell prices IPO as London bags another listing

 
Tim Wallace
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KAZAKHSTAN telecoms firm Kcell priced its London listing yesterday, joining the flood of Russian and central Asian firms looking to raise funds in London.

The leading mobile phone operator hopes to raise between $525m and $650m in the initial public offering (IPO). That would value the firm at $2.1bn (£1.3bn) to $2.6bn, as the 50m shares on offer represent 25 per cent of total share capital.

The instruments on sale in London are global depository receipts (GDRs), as is common in such IPOs.

The price range per GDR has been set at $10.50 to $13.00.

Kcell’s listing is being undertaken as part of a deal with Kazakhstan’s government which wants the national champion to raise funds. But it is not thought the firm wants to use the cash to invest – rather it plans to pay down debts with the funds.

The government is not thought to be forcing the deal through rapidly, as it is aware of global market conditions.

But Kcell itself is understood to be keen to list before the year is out in case the US fiscal cliff is not averted and causes market chaos.

London plays host to part of the listing because Kazakhstan’s markets are relatively immature and may struggle to support an IPO of this size.

“Support for the deal was enormously strong at the London roadshow,” a banker working on the IPO told City A.M. “We did two days’ worth of business in the first five hours, with particular interest from emerging markets funds.”

However the banker conceded demand had been slightly tempered by the MegaFon IPO, which suffered from low demand and only priced at the bottom end of the scale.

After another day in London, roadshows will now be held in Europe and New York, with the book due to close on 11 December and trading due to start the next day.

ADVISERS KCELL’S IPO

UBS
GLOBAL COORDINATOR

CREDIT SUISSE
GLOBAL COORDINATOR

VISOR CAPITAL
DOMESTIC BOOKRUNNER

Swiss giants UBS and Credit Suisse are leading the international drive on Kcell’s initial public offering (IPO), which includes roadshows in London, Europe and New York.

The pair are joined by Kazakhstan’s Visor Capital, partly because Kcell is a national champion, and partly because the listing is joint London and Kazakhstan, so Visor is leading the domestic offer.

Those joint global co-ordinators are being joined by Renaissance Capital, which steps in as joint bookrunner, and Halyk Finance, which is a co-manager on the global offer.

Credit Suisse in particular has recent experience with joint London listings from the same region – it was a joint global coordinator and joint global bookrunner on the Sberbank IPO earlier this Autumn.

But all of the banks avoided the MegaFon deal, which was hit when Goldman Sachs withdrew, and only managed to come in at the bottom end of the price range.