LONDON: Novolipetsk Steel, Russia's fourth-biggest steel producer, is all set for a London Stock Exchange listing, valuing the company at 6 billion pounds. It is 90 per cent owned by Vladmir Lisin, a Russian metals trader of high worth, who began as an ordinary welder in a coalmine. The float is considered the largest in London after the listings during the dotcom boom.
The company, with a turnover of $4.5 billion in 2004, had earnings before interest, tax and depreciation at $2.6 billion.
Russian companies have so far raised 2.5 billion pounds through sale of shares in Britain, the largest sale being that of Sisterma, which raised as much as 1.3 billion pounds.
Novolipetsk Steel has engaged UBS and Merrill Lynch to handle the float. The company had actually started exploring the potential of a LSE listing earlier this year when the Russian regulator permitted it to list up to 25 per cent of its equity. Analysts now feel the company may offer 10 per cent of its shares in the form of global depository receipts, raising nearly 600 million pounds, most of it going to Lisin directly, as the company is already cash-rich. The company has funded its modernisation plan through internal accruals.
Lisin's rise to be one of the steel kings in Russia is interesting reading. After beginning his career as a welder in 1975, he joined the steel industry and became part of the metal trading group Trans-World Group in 1991, handling aluminium and steel. The group broke up in 2000 leaving Lisin a majority owner of Novolipetsk.
Lisin is keen on the company getting into LSE as he feels he can pursue acquisitions. He had missed out on Turkish steel group Erdemir and Ukrainian steel company Kryvorizhstal, which went to Lakshmi Mittal for $4.8 billion.
Novolipetsk, based in Lipetsk, 300 kilometres south-east of Moscow, owns its own trains to transport steel and holds controlling stake in Tuapse port on the Black Sea. Its plant covers 30 sq. kms. and employs 47,000 people. It is known to control about 90 per cent of its iron ore requirements and 35 per cent of its energy supplies.
The company is already listed in Moscow, making just 5 per cent of the equity public.
Posted
on : Mon, 21 Nov 2005 08:40 GMT | Business News
By : Anne Philips
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