Page 85 - RusRPTMay19

Tomsk Distribution Co RUB 0,4 4 0,017 4,8% 0,017 4,8% Medium pref
Kubanenergo RUB 70,6 346 0,928 1,3% 0,928 1,3% Low
Source: Bloomberg, ATON Research
8.3.3 ECM news
Burger Rus, the Russian operation of the Burger King fast food chain, could hold an IPO on the Moscow Exchange this year, Reuters reported on April 22 citing unnamed banking sources. Reportedly, VTB Capital together with Morgan Stanley and JP Morgan will be organizing the IPO. While not a single IPO or SPO was seen in 2018, 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. However, the SPO by meat major Cherkizovo failed, as reported bybne IntelliNews. Fast food was the fastest growing segment of Russian catering market in 2018, expanding by 13% year-on-year to RUB1.52 trillion ($23.8bn), and taking almost 50% of the market. The fast food segment is growing fastest in Russia’s far-flung regions, due to lower incomes of the consumers. Analysts surveyed by Vedomosti believe that Burger Rus is an attractive asset, but perhaps too small for an IPO, with estimated revenues of little over RUB50bn ($784mn) in 2019 and a valuation of about RUB34-37bn. But the catering market is underrepresented on the equity market, which could raise investor interest. The franchisee of Burger King in Russia is 100% owned by Cyprus-based Burger King Russia, controlled by VTB Capital (acquired 48.8% stake in 2012 for $50mn), and Xomeric Holding (20%, reportedly affiliated with Ukrainian bankers Makar Pasenyuk and Konstantin Stetsenko). The chain operates 550 Burger King restaurants in Russia.
The Raspadskaya BoD has approved a buyback of 20.4mn shares,
representing 2.9% of the share capital, at RUB141 per share ($2.18 per share at the current exchange rate). The ruble price represents a 2.9% premium to the close of trading at the end of April and a 1.8% discount to the three-month VWAP. The total buyback amount is $44.5mn. Evraz (which owns 83.84% of Raspadskaya) will not participate in the buyback. If the buyback is completed in full, the free float should decrease from the current 16.16% to around 13.6%.
Russian rail operator RusTransCom, specialising on transportation of grain, mineral fertilisers, and timber, has postponed its plans to hold an IPO, the company said in a statement. Previously the company unveiled its plans to hold an IPO at the London Stock Exchange and hopes to raise $300mn, which would make the first IPO of a Russian company in almost two years on the LSE. Since the beginning of 2019 there have been a number of deals carried out on Russian equity market, after no deals since August 2018. However, the postponement of the SPO of meat major Cherkizovo, and now the IPO of RusTransCom, brings first slips to the trend.
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
85 RUSSIA Country Report May 2019 www.intellinews.com