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Severstal will start trading its global depositary receipts (GDRs) on the London Stock Exchange on Tuesday
Severstal [RTS: CHMF], Russia's second-largest steel producer, will start trading its global depositary receipts (GDRs) on the London Stock Exchange on Tuesday, at a price of $12.50 per GDR in a bid to raise around $1.1 billion. Each GDR will represent one ordinary share. With Severstal shares trading on Moscow's RTS bourse at around $12, and slightly higher on MICEX, some analysts fear the public offering is overpriced. The offering has been priced at the higher end of the previously announced price range of $11-13. The asking price of $12.50 per GDR implies a market capitalization of approximately $12.70 billion, substantially higher than Severstal's current $11.2 billion capitalization on Russian bourses. Conditional dealings had started on the London exchange on November 8. Severstal will be admitted by the UK Listing Authority later Tuesday. The GDRs will have the ticker SVST on the LSE. Severstal hit the headlines in spring this year over its attempt to merge with Luxembourg's Arcelor, to form the world's biggest steel producer, a bid that was rejected by Arcelor in favor of Mittal Steel. Arcelor subsequently paid Severstal 140 million euros (about $180 mln) in compensation. Severstal Chairman Alexei Mordashov, who controls 81% of the Cherepovets-based company, said last week he intended to use the funds raised in London to expand the company, and give it a stronger global presence. Mordashov said earlier his company plans a future merger with a big partner in the sector, but only if it is beneficial for shareholders. The placement on the LSE is being organized by Frontdeal Limited, a Cyprus-registered company controlled by Mordashov. Through the public offering, the company aims to sell 9.1% of its shares, raising $1.1 billion, and bringing the total free float to over 20%. The company is authorized to place abroad 253.9 million of its common shares, or 24.99% of its charter capital, by Russia's Federal Service for Financial Markets.
Print Severstal will start trading its global depositary receipts (GDRs) on the London Stock Exchange on Tuesday Bookmark Severstal will start trading its global depositary receipts (GDRs) on the London Stock Exchange on Tuesday

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