Paper giant to list in London

INDIA’S biggest paper producer, Bilt Paper, is to list on the London Stock Exchange to raise $330m (£203m) to fund growth, it said yesterday.

Bilt will use the net proceeds of the issue to finance $170m of capital expansion, including bigger wood pulp mills and paper production facilities.

The rest will be used to pay down $140m of debt to its parent company Ballarpur International Holdings.

The listing is expected to be at least 25 per cent free float, a spokesman told City A.M., and the company is keen to list before Easter, with a mid-April target date.

The price will be determined following a roadshow of investors that starts today. It is unlikely to shelve the offer due to current market conditions, the spokesman said. Bilt, which generated $358m revenues in the six months to December, expects to join the FTSE 250 index.

Two private equity investors, including a JP Morgan fund, which owns 20 per cent of the equity, will have the option to sell a portion of their shares.

Bilt has capitalised on India’s soaring demand for paper, which will grow at a rate of 5.5 per cent per year between 2008 and 2020. Its own paper production capacity has risen 88 per cent since 2008. “Indian paper demand is expected to increase significantly throughout the next decade,” its chairman R.R. Vederah said.

Bilt is part of the Ballarpur paper group, which is 49.4 per cent owned by Indian conglomerate Avantha.

ADVISERS: CITIGROUP AND JP MORGAN

SIMON ALEXANDER

CITIGROUP

CITIGROUP Global Markets is sole sponsor to Bilt’s offering, with corporate broking director Simon Alexander leading the team.

Alexander has been involved in high profile deals such as Dubai logistics group DP World’s takeover of transport operator P&O in 2005 and the sale of music publisher Chrysalis to BMG last November.

Citi’s UK global markets division is also joint global co-ordinator and bookrunner to the offer alongside JP Morgan Cazenove.

Cazenove’s relationship with Bilt is thanks to its longstanding links with Avantha group, Bilt’s overall owner.

James Taylor, managing director of corporate finance is leading the team. His expertise lies in emerging markets and resources and he counts mining giant Xstrata and Nat Rothschild’s vehicle Vallar among clients. He also understands the difficulty of post-financial crisis IPOs: Cazenove had to stabilise Essar Energy’s share price last year after it fell seven per cent following its £1.3bn London IPO.