FREIGHT train operator NefteTransService (NTS) is set to become the first Russian firm to join the London stock market this year.
NTS Holding announced its intention to float on the main market yesterday, and a source said the firm expects to raise up to $500m (£311m) for 25 per cent of its global depository receipts.
Russia’s largest private rail operator will begin a roadshow for investors at the end of the month, and hopes to complete the offer in the first half of the year. The firm was founded in 2006 by Vadim and Vyacheslav Aminov and counts oil explorer TNK-BP and coal miner Suek among its biggest clients. Last year it paid around $300m to buy London-listed Evraz’s rail assets.
NTS joins a growing list of Russian firms including Megafon and MD Medical that have helped keep the City’s IPO market in business in an otherwise moribund funding environment.
ADVISERS NTS FLOAT
RENAISSANCE MORGAN STANLEY JP MORGAN
WITH the equity capital markets still lethargic after the turmoil of the last five years, NTS’s plan to raise up to $500m – and in London, no less – is a relatively big score for the banks involved.
Russian firm Renaissance, plus bankers from JP Morgan and Morgan Stanley, are hoping to convince investors to take up NTS stock.
Morgan Stanley is fresh from getting away Megafon’s controversial float in November, which saw Goldman Sachs pull out of the deal amid concerns about the firm’s corporate governance.
JP Morgan, which was one of the first banks to launch a Russia-focused equities fund, was hired to float Russian healthcare group MD Medical in October.
Renaissance, a stalwart of the Russian IPO market, was one of several banks to work on Ruspetro’s London $250m float last January. The firm priced at 134p, but has sunk to 51p over the last year.
The bank has also floated Phosagro and Etalon in recent years, though others including Promsvyazbank have been pushed into the buffers by low demand.
More than 60 Russian firms floated in London between 2005 and August 2012, – ahead of Moscow, which attracted just 36 firms to its exchanges, according to PwC.