Russia’s O1 Properties to float

Marion Dakers
RUSSIAN real estate group O1 Properties has said it plans to float in London, in a public offering that could raise at least $400m.

The firm, which has a portfolio of properties across Moscow worth more than $2bn, said it will use the funds to buy two new buildings in the city and repay some of its debts.

The company began pre-marketing its sale of global depository receipts yesterday, sources said, with a roadshow expected to start next month.

The firm did not reveal how big a stake will be offloaded in the sale.

“The IPO on the London Stock Exchange will allow us to strengthen our market position, diversify our capital structure and funding resources, and accelerate our growth,” said chief executive Dmitry Mints.

Mints, a former managing director at Otkritie Financial, teamed up with other Otkritie alumni to set up O1 back in 2010.

The group is owned by Boris Mints, co-owner of Otkritie.

The IPO would be the biggest float by a Russian firm since Phosagro’s market debut in July, which raised $538m.

Last year, Russian property group Etalon floated $500m of its global depository receipts in London to fund expansion. The firm’s shares tumbled from an initial price of $7 to less than $3 in October amid market turbulence, but have since recovered to near the float price.

Several other Moscow-based companies have also sought funds through the London markets in the last year including bank Nomos, which raised $782m.

But others, including steelmaker Mechel, delayed money-raising plans in 2011 as the Eurozone crisis all but froze the capital markets. Mechel is considering a fresh attempt at floating its mining arm.