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Russia’s Segezha Group Seeks $2 Billion Valuation in IPO

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Yuliya Fedorinova
·2 min read
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(Bloomberg) -- Wood, paper and packaging producer Segezha Group set a price range for its initial public offering in Moscow that values the company at as much as 152.4 billion rubles ($2 billion).

That’s the top end of the 7.75 rubles to 10.25 rubles per share range offered to investors, Segezha, owned by billionaire Vladimir Evtushenkov’s Sistema PJSFC, said in a statement on Wednesday. The valuation of the company is given on a post-money basis, with pricing expected around April 28.

Russian companies have joined the global IPO rush this year but the momentum may slow after the U.S. imposed fresh sanctions including restrictions on buying new sovereign debt. Political tensions are mounting over Moscow’s troop buildup on the Ukraine border, while supporters of jailed opposition leader Alexey Navalny plan protests across Russia on Wednesday as President Vladimir Putin gives his annual state-of-the-nation address.

In early March, discount retailer Fix Price’s IPO raised about $1.8 billion in the biggest listing from a Russian company in a decade. But toward the end of the month, the owners of GV Gold PJSC, a miner backed by BlackRock Inc., put its share sale on hold indefinitely as the market weakened.

Segezha last week said that it plans to raise at least 30 billion rubles selling new shares, while Sistema will provide an over-allotment option of secondary shares, equivalent to as much as 15% of the stock offered in the IPO, to the underwriters.

Higher Revenue

The group is set to become Russia’s first publicly traded, vertically integrated forestry company as consumers turn away from plastics, boosting demand for its products, such as kraft paper, paper sacks and bags, and birch plywood.

“I am pleased with the positive response we have seen from the global investment community to Segezha Group’s proposed IPO,” Mikhail Shamolin, the company’s president said in the statement.

Segezha said its first-quarter revenue could jump as much as 29% to 18.5 billion rubles from a year earlier as stronger demand supports higher prices and production.

JPMorgan Chase & Co, UBS Group AG, VTB Capital Plc, Alfa Capital Markets Ltd, Gazprombank JSC, BofA Securities and Renaissance Capital are helping to organize Segezha’s IPO.

(Adds political tensions in third paragraph, first-quarter revenue eighth)

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