OAO Transneft and OAO Sovcomflot are among Russian companies seeking to list abroad this year as delays in lender OAO Sberbank’s secondary share offering free up investors, according to Bank of New York Mellon Corp.
American depositary receipts of state-run Sberbank slid to a two-month low in New York today after Chief Executive Officer German Gref said a report that Russia’s biggest bank will sell $6 billion of shares in London in the next two weeks is incorrect, according to the RIA Novosti newswire. Futures expiring in June on Moscow’s RTS Index slipped 0.5 percent to 154,715 by 11:18 a.m. in New York.
Transneft, operator of Russia’s oil pipelines, and shipping company Sovcomflot may join iron ore explorer OAO Metalloinvest, petrochemical producer ZAO Sibur Holding, and diamond miner OAO Alrosa in listing depositary receipts outside of Russia in 2012, said Azat Nougumanov, a Moscow-based vice president for new business development at BNY Mellon. Oil producer RusPetro Plc is the only Russia-based company to hold an initial public offering of shares this year, from five IPOs last year and 13 in 2007, data compiled by Bloomberg show.
“If Sberbank sells its shares there won’t be enough cash for others,” Nougumanov said in a phone interview yesterday. “I expect a new wave of share sales outside of Russia in October or November.”
The Russian companies, seeking to raise at least $300 million each from selling shares, will probably consider issuing global depositary receipts in London or New York because “it’s hard to raise that much in Moscow,” he said.
Russia ETF Slips
Anna Bokina, a spokeswoman for Sovcomflot, and Rashid Nureyev at ZAO Sibur both declined to comment on prospective share sales. Officials in the media divisions of Metalloinvest and Alrosa, the world’s largest diamond mining company by output, didn’t respond to e-mails or phone calls to their offices.
The Market Vectors Russia ETF, a U.S.-traded fund that holds Russian shares, fell 1.2 percent to $29.57 in New York, poised for the lowest closing price since Jan. 24 in a second day of declines. The RTS Volatility Index, which measures expected swings in the index futures, rose 0.7 percent to 32.60 today.
Preferred shares of state-controlled Transneft jumped 2.8 percent to 57,538.00 rubles on Moscow’s Micex Index, or the equivalent of $1,933.22.
A decision on whether to sell depositary receipts is “yet to be made,” Igor Dyomin, head of Transneft’s press service, said by phone from Moscow yesterday.
‘Better to Wait’
“It’s the government, the owner of the company, that has to approve the decision and we will do what it says to do,” he said. “It would be better for us to wait another year or year-and-a-half until the markets recover from the crisis.”
Russia floated the possibility of selling stakes in state-run companies in the wake of the global credit crisis, before delaying the plan as Europe’s debt problems again roiled international markets. The Micex has climbed 6.7 percent this year, after sliding 17 percent in 2011. The Bloomberg Russia-US Equity Index of Russian companies traded in New York dropped 1.2 percent to 103.82 today, trimming its advance to 15 percent in 2012.
The government will approve an expanded asset sale plan in the next six to eight weeks, RIA Novosti reported yesterday, citing First Deputy Prime Minister Igor Shuvalov. Stakes in OAO Novorossiysk Commercial Sea Port, Sovcomflot, Sberbank and VTB Group, Russia’s second-largest bank, as well as Moscow’s Sheremetyevo and Vnukovo airports may be included in the sale, the news service reported.
The Micex slipped 0.9 percent to 1,496.81 in Moscow, while the RTS gauge fell 0.3 percent to 1,602.58.
Mirny, Russia-based Alrosa was little changed at 29.88 rubles, or $1. Metalloinvest has had a listing pending on the RTS since August, according to company filings.
ADRs of Sberbank, which have been listed in New York since June last year, slid 1.1 percent to $12.72 today, set for the lowest closing price since Feb. 10. The ADRs trade at a 1.5 percent discount to the bank’s Micex-listed shares, after the Moscow stock slid 0.3 percent to 95.61 rubles, or $3.21.
Sberbank plans to start marketing about $5.7 billion of shares on April 16, people with knowledge of the process who declined to be identified said last month. The central bank, Sberbank’s chief shareholder, may sell some of its controlling stake when the stock price moves “closer to 100 rubles,” Bank Rossii First Deputy Chairman Alexei Ulyukayev said in Davos in January.
Any secondary sale of Sberbank shares will depend on the market, Gref said, according to RIA Novosti. Officials in OAO Sberbank’s press service declined to comment on whether the bank will sell shares this year or delay the sale until 2013. The Micex shares have fallen from a 2012 high of 103.85 rubles reached on March 14.
Russia’s President Dmitry Medvedev ordered the government and central bank last month to formulate proposals by Sept. 1 on lowering state stakes in lenders to less than 50 percent. Bank Rossii holds 60.3 percent of Sberbank, data compiled by Bloomberg show. The nation will accelerate the privatization process in the coming weeks, Arkady Dvorkovich, Medvedev’s chief economic aide, told reporters in Moscow today.
“It would make every sense for Sberbank to delay the sale until at least November or even early 2013 when market conditions improve,” BNY Mellon’s Nougumanov said. “The pool of investors focused on Russian markets is relatively narrow. Sberbank is a must-have stock and every fund will want to have it in its portfolio, and that means there won’t be enough money for others to raise.”
Crude oil for May delivery dropped 1.1 percent to $101.43 a barrel on the New York Mercantile Exchange. Brent oil for May settlement fell 1.4 percent to $121.01 on the London-based ICE Futures Europe exchange. Urals crude, Russia’s chief export blend, slipped 0.4 percent to $119.03.
ADRs of OAO Gazprom, the world’s largest natural gas producer and Russia’s biggest company, tumbled 2.8 percent to $11.72 in New York, headed for their lowest close since Jan. 20. Trading volumes slid to 293,155 yesterday, almost 67 percent below the three-month average, data compiled by Bloomberg show.
Russia may link the state-run company’s mineral extraction tax rate to gas prices, resulting in the government getting as much as 80 percent of Gazprom’s additional income from rising prices starting from July 2013, Moscow’s Kommersant newspaper reported yesterday, citing Finance Minister Anton Siluanov. That could translate into 50 billion rubles ($1.7 billion) of extra tax revenue for Gazprom in the second half of 2013, the newspaper said.
United Co. Rusal, the world’s largest aluminum producer, was unchanged at HK$5.76 in Hong Kong trading. The MSCI Asia Pacific Index gained 0.2 percent today.