Sovcomflot plans to raise at least $500 million in an initial public offering (IPO) on the Moscow Exchange to spend on new projects and reducing debt, Russia’s top shipping company said on Tuesday.
The move by the state-controlled firm comes as Russian airline Aeroflot also plans to raise capital in a secondary public offering (SPO).
For Aeroflot, the cash is needed to fight the economic fallout from the COVID-19 pandemic.
Sovcomflot (SCF) aims to list in early October, two sources familiar with the plans told Reuters. The company provided no valuation guidance, but a banker involved in the deal pointed out its peers traded at 7-12 times their expected core earnings (EBITDA), multiples that would value Sovcomflot at $7-12 billion.
The company, which specialises in hydrocarbon transportation, pointed to strong financials, including an adjusted EBITDA margin of over 70% for the first six months of 2020 and plans to pay at least 50% of its 2020 net profit as dividends, targeted at $225 million, in an effort to woo investors.
“SCF’s strategy remains focused on maintaining our ‘preferred carrier’ status with the major oil and gas companies by renewing and expanding our fleet, with a particular focus on the industrial projects that have historically provided long term predictable cash flows and profitable returns on invested capital,” CEO Igor Tonkovidov said in a statement.
VTB Capital, Citigroup Global Markets Limited, Sberbank CIB, J.P. Morgan and BofA Securities are acting as joint global coordinators and joint bookrunners for the offering, Sovcomflot said.
The Russian government, which will remain Sovcomflot’s major shareholder after the IPO, has been considering a listing of the company for years as part of broader privatisation plans.
Obstacles ranging from weak markets to international sanctions placed on Russia over its role in the Ukraine crisis previously prevented such a move.
(Reporting by Anton Kolodyazhnyy and Gleb Stolyarov; Additional reporting by Arno Schuetze in Frankfurt; Writing by Alexander Marrow and Olzhas Auyezov; Editing by Katya Golubkova and Mark Potter)