Oleg Deripaska is first Russian business owner to attempt an IPO in London since the 2014 annexation of Crimea © Bloomberg
Oleg Deripaska, the Russian metals tycoon, will seek a valuation of as much as $8.5bn for EN+, his aluminium and hydropower business, in a test of western investor sentiment for Russia’s first London IPO since 2014.
EN+ will price its shares and global depositary receipts on the Moscow and London exchanges at $14 to $17, it said on Monday, valuing the company at $7bn to $8.5bn before the issuing of $1bn of new stock.
Mr Deripaska built up his metals and energy empire by acquiring stakes in former state-owned assets in the chaotic years after the collapse of the USSR. VTB Capital, the investment bank, owns 4.35 per cent of EN+, and Mr Deripaska the remainder.
He will be the first Russian business owner to attempt an IPO in the London market since Moscow’s annexation of Crimea in 2014, which sparked western sanctions against the country and chilled investor sentiment.
“The price range of $7-8.5bn looks fine. This would be fair and offer good upside potential for market participants,” said Oleg Petropavlovskiy, a senior analyst at BCS Global Markets in Moscow. “We value the business at $10bn. If they place their shares at $10bn it would be unattractive.”
EN+ aims to raise $1bn through issuing new stock, and CEFC China Energy, the private energy group has separately agreed to buy $500m of existing stock, as part of the offering. The Qatar Investment Authority is in talks to invest in the $1bn share sale, sources told the Financial Times.
The listing is expected to take place in November, with the $1.5bn of shares representing between 15.8 per cent to 18.8 per cent of the company’s issued capital. The proceeds will be used mainly to pay off debt, the company said.
Glencore, the commodity trader, has also agreed to convert its shares in Rusal, the aluminium producer owned by EN+, into EN+ stock after the IPO.
After the Glencore share exchange, EN+ will own 56.9 per cent of Rusal. Glencore will own a stake in EN+ to be calculated on the basis of the final IPO price.
EN+ owns five hydropower dams in southern Siberia and currently has a 48 per cent stake in Hong Kong-listed Rusal, to which it sells the bulk of its electricity. It also owns several coal mines and coal-fired power stations.
While Mr Deripaska, 49, is best known for the metals and mining investments that have brought him an estimated $6bn personal fortune, he has sought to present himself as an environmentalist with the EN+ sale.
The company also has investments in solar panels and electric batteries and EN+ appointed a former UK climate change minister as independent chairman last week.
Maxim Sokov, EN+ chief executive, said the company was “delighted with the level of interest” in the investment proposal. EN+ has announced an additional interim dividend of $125m to shareholders to be paid out after the IPO and its bookbuilding and investor roadshow begins on Monday.
Citigroup, Credit Suisse, JPMorgan, Merrill Lynch, Sberbank and VTB Capital are co-ordinating the IPO.
This article has been changed to reflect the fact that CEFC China Energy has agreed to buy $500m of existing stock