Russian coal firm IPO oversubscribed

Russian coal firm IPO oversubscribed

Investor bids have already more than covered the book for the initial public offering of shares by Raspadskaya, the first coal company to float on the Russian stock market, a banking source said on Thursday.

Raspadskaya, part-owned by steel maker Evraz Group , said on Monday it would offer 18 percent of its capital, or 140.8 million shares, on the Moscow market at $2.00-$2.50 each, potentially raising up to $350 million.

“That deal was oversubscribed after two days of bookbuilding,” said one banking source familiar with the IPO.

The source added there had been keen interest from London-based mining investors and continental European funds in the offering, whose books close on Nov. 9.

Credit Suisse, Deutsche UFG and Morgan Stanley are acting as joint bookrunners on the IPO.

Raspadskaya is Russia’s second-largest producer of coking coal used in steel making. The IPO would value the company at between $1.56 billion and $1.95 billion, according to Reuters calculations.

Raspadaskaya has said the seller in the IPO is Corber Enterprises Ltd., an entity owned 50-50 by Evraz Group and the mine’s management that owns more than 95 percent of the company.

Analysts and Russian media have said Raspadskaya planned this year to mine 10 million tonnes of coal and to increase output to 17 million tonnes by 2010.

The company said it produced 9.7 million tonnes of coking coal in 2005. It owns two underground coal mines and an opencast mine, a coal preparation plant and its own transportation network, and is constructing a third underground mine.

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