Roman Abramovich’s Evraz, the largest producer of coking coal in Russia by output, is considering an IPO of its North American operations as it seeks to pay down billions in pre-crisis debt, the Financial Times reported. Reports on Thursday suggested the London-listed company is planning a US initial public offering that would value the unit at about $2 billion.
On Friday, Evraz said: “In response to certain market rumours, Evraz announces that it is currently considering a registered initial public offering of ordinary shares of its North American subsidiary, Evraz North America.
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“The company has not filed a registration statement, but may do so in the foreseeable future, ” the statement added. “As previously announced, Evraz remains committed to its North American operations and continuing to grow its business in North America.”
The London-listed shares rose more than 7 per cent on Thursday in reaction to the news, moving up another 2.5 per cent on Friday to 144p, as Evraz confirmed the plans.
Evraz operates seven plants in the US and Canada, producing pipes and rails, according to the Financial Times. The Americas region accounts for about $1.75 billion out of its $6.8 billion in annual sales.
Over the first-half of 2014, however, steel output at Evraz’s North American operations declined by about 14 percent, compared with 2013, mostly because its facility in Delaware has been shut down.
An IPO now would test the market’s appetite for Russian companies, during the crisis in the Ukraine. The sanctions against Russia have slowed down lending to Russian companies by US and European banks, and Evraz’s London-listed shares temporarily fell to an all-time low. Nevertheless, since March, Evraz’s shares have risen more than 150 per cent, leaving them broadly unchanged compared with a year ago.
Evraz is co-owned by Mr Abramovich, Alexander Abramov, who is also chairman of the company, and Alexander Frolov, chief executive.
