Page 84 - RPTRusFeb17

which raised the equivalent of €333mn in the country’s first big IPO of the year.
One of Russia’s largest food retailers Lenta could place its shares in the marker to lower the stake of its largest shareholder American TPG, Reuters reported on February 14, citing unnamed banking sources. TPG holds 34% in the company, with the European Bank for Reconstruction and Development (EBRD) being the second largest shareholder with 7.37%. Reportedly EBRD could also sell part of its shares. Lenta saw 20% sales growth in July-September and 21.3% for the nine months of the year, the company said on October 20 .
Russia's largest carmaker Avtovaz is preparing an issuances of shares worth RUB95bn (€1.5bn), Vedomosti daily reported on February 13. The issuance is to be approved at an extraordinary shareholders' meeting scheduled for March 15. In addition, Avtovaz's owners, Renault and Russia's state-run corporation Rostech, are to convert the carmaker's outstanding debts into its shares. The size of the share issuance is comparable to the company's outstanding debt, which reached RUB86bn in December 2016, Meanwhile, Carlos Ghosn, general director of Renault, was quoted by Vedomosti as saying that Avtovaz will turn in a profit in 2018 regardless of instability on the Russian car market.
TMK’s subsidiary Rockarrow Investments Limited has acquired a 13.44% stake in TMK from VTB, according to Vedomosti. The deal was closed on 1 March. As a result of the company's SPO, completed at the beginning of February, the free float in TMK's shares increased to 29.7%, which visibly improved liquidity in the name: the 30-day ADTV reached $1.8mn (trading volume in GDRs has reached some $10mn on some days of late) compared with the average 30-day ADTV of $0.3mn in 2016.
8.4 International ratings
RUSSIA - Rating agency
March 2016
June 2016
March 2017
Bond rating: Moodys
Ba1 (N)
Ba1 (N)
Ba1 (S)
Bond rating: Fitch
BBB- (N)
BBB- (N)
BBB- (S)
Bond rating: S&P
BB+ (N)
BB+ (N)
BB+ (S)
Moody's has improved its sovereign ratings outlook for Russia from negative to stable , while the rating itself remains at Ba1. Per an agency release, the mid-term strategy of budget consolidation was the key factor in driving the change, a strategy that will help reduce Russia's dependence on hydrocarbon revenue and replenish reserves. Among factors constraining the rating are limited growth potential (between 1.5-2%), as well as a lack of structural reform and high living standards.
Russia’s credit rating will not return to investment grade for at least another 1-2 years , international ratings agency Standard & Poor’s (S&P) said on January 7.
Currently S&P have Russia assigned at BB+ with a stable outlook, one notch below investment grade.
84 RUSSIA Country Report February 2017 www.intellinews.com