Page 11 - bne_newspaper_April_12_2019

bne Invest
April 12, 2019 www.intellinews.com I Page 11
First slip in Russian equity hype as Cherkizovo cancels SPO
The growing enthusiasm for Russian equity took a know this week when Russia's largest meat and poultry maker Cherkizovo announced it will postpone its SPO on Moscow Exchange for an undetermined period due to market conditions, according to the April 10 reports by Vedomosti and Reuters.
This makes the first slip in the much-hyped raft of equity deals prepared in Russia since the beginning of 2019. While not a single IPO or SPO was seen in 2018, but since the start of this year a number of companies have announced deals including Polyus Gold which raised $390mn from a placement and rail operator RusTransCom that announced IPO plans, among others.
According to the representatives of the meat major, while the "company has met an apparent
interest [from investors], in the current macroeconomic situation investors are not ready to buy into the mid-caps."
The subscription book did not get enough bids, as the valuation was seen as too high, sources told Vedomosti. Cherkizovo Group valued itself at RUB89bn-101bn ($1.4bn-1.55bn) ahead of the SPO, and the company previously said it will seek to raise up to $200mn in the SPO.
Investors snubbed Cherkizovo despite the company muscling up since 2018. As reported by bne IntelliNews, it is gearing up to become an uncontested poultry market leader through a serious of acquisitions that started in 2018, ahead of the promising opening of Chinese poultry exports.
Russia's Gazprom increases dividends, but short of state requirement
The board of Russia's natural gas giant Gazprom suggested paying RUB10.43 per share in dividendsfor 2018, making a total payment of RUB247bn ($3.8bn), Vedomosti daily reported on April 11 citing the announcement of the company.
In line with previous reports, this would be the biggest dividend payout in Gazprom's history, and the first time that the per-share dividend payout climbs into double-digits. However, as a share
of net profit for 2018 the total payout would only amount to 17.5% — well below the state-ordered mandatory payout of 50% of profits.
Net profit for 2018 is expected at RUB1.42 trillion or $20.4bn. In 2017 and 2016 Gazprom paid about
RUB190bn in dividends, or about 27% and 20% of IFRS net profit, respectively.
So far Gazprom has managed to avoid paying
out the full 50% demanded from all state-owned enterprises (SOEs) by the Ministry of Finance, but the government is keen to increase its revenues via dividend payouts and the pressure to increase the payout has not abated.
In 2019, the government expects to receive almost RUB590bn ($8.9bn) from SOEs as dividends, another RUB626bn in 2020, and by 2021 their amount should increase to RUB675bn.