Mechel is the first Russian company to choose the Frankfurt stock exchange over London or New York.
Photo: Valery Melnikov
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Mechel Places Preferred Stock
The Mechel mining and smelting company officially announced a placement of preferred stock in Russia and abroad. Permission from the Federal Financial Markets Service has already been obtained. Sources say that the company has chosen the Frankfurt Deutsche Boerse stock market for that purpose. It is the first Russian company to choose that market over London or New York, although over 50 Russian companies are already traded on the Frankfurt exchange. In spite of the usual inactivity in the month of July, the initial public offering may be successful thanks to growing prices for raw materials.
The company plans to place 55 million preferred shares for 11.67 percent of its expanded authorized capital. In accordance with quotes on its stock yesterday, the placement may be worth up to $2.3 billion. Morgan Stanley and Renaissance Capital will be lead underwriters of the IPO and KIT Finance will be a co-underwriter. Deutsche Bank will be the depositary. The road show for the IPO will begin on July 9 and the price range will be set on July 23. There will be no over-allotment (green shoe) option for the underwriters. Mechel GDR on the Frankfurt exchange will be denominated in euros.
This is probably the first time a Russian company has placed preferred stock on a foreign market, a move perhaps intended to avoid reducing the share of the main stockholder in the company, general director Igor Zyuzin. The fact that the company has used the US GAAP accounting standard for the last four years eases the placement and it is expected to be highly successful.
www.kommersant.com
All the Article in Russian as of June 25, 2008
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