TMK Says No Need to Sell Shares in U.S. Unit as Ruble Weakened

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OAO TMK, the world’s largest pipe-maker by output, said it doesn’t need to sell shares in its U.S. unit after a falling ruble helped improve its finances.

“We’re still keeping the IPO as an option for the future but the markets aren’t good for it now, and our debt metrics improved after the ruble weakened,” billionaire Chairman Dmitry Pumpyansky said in an interview at the St. Petersburg International Economic Forum.

The Russian currency’s 46 percent drop last year helped companies with ruble-denominated debt because the liability was reduced in dollar terms. TMK said in October that it may consider an initial public offering in its U.S. unit to reduce debt after funding costs rose because of the crisis in Ukraine.

TMK’s debt declined to $3.1 billion as of the end of March from $3.6 billion a year earlier. More than 30 percent of the debt is in rubles.

The company’s London-traded closed 2.3 percent to $4.17 higher after rising as much as 4.1 percent in intraday trading. The stock has gained 80 percent this year.

TMK still sees U.S. assets as attractive, and it isn’t going to exit them, Pumpyansky said.

Lower oil prices are more painful than anti-Russia sanctions for TMK, and if crude price stabilize at $60 to $65 per barrel in the coming months, demand for TMK’s products will rebound, he said.

Evraz Plc, another Russian steelmaker that was planning an IPO of North American assets, also suspended the deal.

(See EXT3 for St. Petersburg Economic Forum news.)
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