Megafon set to list in London by December

 
Tim Wallace
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TELECOMS firm Megafon re-started the flood of Russian firms looking to list in the City yesterday, announcing the price on its joint London-Moscow listing as its delayed initial public offering (IPO) comes to market.

The offering was held up by the group’s acquisition of handset maker Euroset and by the third quarter financial results.

Speculation over corporate governance standards arose last month when Goldman Sachs dropped off the list of advisers. But the group now believes it has reassured banks and investors.

Megafon, largely owned by Russia’s richest man Alisher Usmanov, hopes to raise a minimum of $1.7bn (£1.07bn) in the IPO, but strong demand means the end figure will be higher.

Global roadshows started yesterday with the bookrunners drumming up support for the shares and, in London, global depository receipts (GDR).

The indicative price range has been set at $20 to $25 per share and GDR.

Trading is then expected to start on 28 November.

“The total size of the London part of the listing will depend on investor demand – but interest has been very keen so far,” said a banking source familiar with the deal.

A swathe of Russian firms have expressed interest in London in recent months, with Sberbank’s $5.2bn joint listing raising hopes that the markets could be coming to life at last.

Those expectations were dashed when weak demand saw Promsvyazbank pull its offering and Megafon’s was delayed. But hopes are once again high that this offering will revitalise the market.

ADVISERS MEGAFON’S LONDON LISTING

MORGAN STANLEY
SBERBANK CIB

INVESTMENT banking giant Morgan Stanley and expanding Russian force Sberbank CIB are joint global co-ordinators on the Megafon initial public offering (IPO). The deal, which includes share listings in Moscow and global depository receipts in London, is expected to raise well above its minimum target of $1.691bn (£1.07bn).

Both have recent experience of similar successful listings – Sberbank itself has listed in London and Moscow in recent months, and Sberbank CIB and Morgan Stanley were two of the bookrunners on that deal. The pair will be joined by Citi, Credit Suisse and VTB Capital as joint bookrunners. The five banks are not expected to have a tough time drumming up support, with investors thought to be very keen to take a chunk of the Russian telecoms business.

But Goldman Sachs is not on the ticket despite initially being on board – its exit raising questions about the state of the listing firm.