Page 82 - bne IntelliNews Country Report: Russia Dec17

on New York Stock Exchange, placing 6.8mn shares at $9. The company is one of the portfolio investments of Russian nanotechnology corporation Rosnano. Rosnano invested about $24mn in Aquantia in 2012, holding 11.1% prior and 8.8% after the IPO in the company, according to Vedomosti daily. Russian corporation's subsidiary Rosnano USA is set to profit well from the remaining 2.8mn shares in Aquantia, as its stake in the company gained in value from $25.2mn to $30.1mn on November 7. In summer 2016 another Rosnano's investment Selecta Biosciences vaccine laboratory made an offering on NASDAQ. Rosnano US currently holds 8.1% in the company, with its value undisclosed. Russian tech sector still has to catch up in terms of IPOs. According to PricewaterhouseCoopers study cited by Vedomosti, from 2005 to 2014 Russian tech and telecom sector saw only 11 IPOs, two of them in Moscow. The last IPO was in June 2013 when Luxoft developer placed its shares on NYSE, as well as Qiwi payment system making a placement on NASDAQ the same year.
Russia's potash major Uralkali has decided to delist from the Moscow Exchange and sell another 10% stake to fertilizer peer Uralchem, t he company said on November 8. After delisting in London in 2015, Uralkali has been spending money on a share buyback, cutting the free-float in Moscow from 28% to little over 5%, causing common shares to be downgraded to Level 3 quotation list and raising net debt to $5.5bn. The buyout program was undermined Uralkali's performance according to analysts and led to downgrades by Fitch Ratings and Moody's Investors Service, as well as inflating the quasi-treasury stock to 54.77% creating governance risks. A 20% stake in Uralkali belongs to Uralchem fertiliser major controlled by Dmitri Mazepin, and another 20% to Belarusian businessman Dmitri Lobyak, who reportedly acquired it from Oneksim Group of tycoon Mikhail Prokhorov. Since mid-2015, global potash prices have fallen and sector competition in Russia has risen amid uncertainty over the future governance structure of Uralkali under Uralchem, the investment case further underminded by LSE delisting and a series of costly buybacks. Now the company will place more preferred stock to existing shareholders to cut debt, and will not pay any dividends in 2017, according to the latest announcements. As of end of June 2017 debt burden of Uralkali stood at 4.43x Ebitda at net debt of $5.5bn, slightly below 4.67x leverage in the beginning of 2017.
8.4 International ratings
Russian ratings by international agencies
Jan 2016
Jan 2017
Sep 2017
Moody's
Ba1 (N)
Ba1 (N)
Ba1 (S)
Fitch
BBB- (N)
BBB- (S)
BBB- (P)
S&P
BB+ (N)
BB+ (S)
BB+ (P)
82 RUSSIA Country Report December 2017 www.intellinews.com