Number crunching: Russian IPOs in London

After enjoying the coveted position as the top-choice listing venue for large Russian companies, leading aluminium producer Rusal shocked the London Stock Exchange (LSE) in 2010 when it opted to go public on the Hong Kong Exchange, with the aim of tapping into the Chinese market.

Nonetheless, Russian IPOs in London have picked up in recent years, particularly after the Russian government decided to launch a new privatisation programme in 2011 following a decade-long hiatus (see box, below).

The Lawyer consulted data from Perfect Information and Thomson Reuters which shows that, although there were no Russian IPOs in London in 2009, in 2010 three companies floated on the LSE, a further six listed in 2011 and there have been two listings so far in 2012.

In January Freshfields Bruckhaus Deringer, alongside Carey Olsen and Kazakhstani law firm Grata, advised Polymetal International on its £490.2m IPO, with Clifford Chance advising the banks on the deal. That same month White & Case advised RusPetro on its £169m IPO, with Clifford Chance again retained to advise the banks.

Clifford Chance also led on two IPOs in 2011. In April, the firm advised Nomos Bank on its $782.2m (£493.8m) IPO. Freshfields and Latham & Watkins were retained to advise the banks. In July, the firm acted for PhosAgro on its £243m IPO as it became the seventh Russian company to float on overseas markets in 2011. Linklaters acted for the banks.

Indeed, magic circle firm Freshfields has acted on its fair share of Russian IPOs. In September 2010 the firm advised TransContainer on its $400m IPO with a dual listing in London and Moscow. Skadden Arps Slate Meagher & Flom was retained to advise the banks on the deal.

In June 2011 Freshfields advised Global Ports Investment on its £359.3m IPO, with Clifford Chance advising the banks.

US firms have also led on a number of London IPOs. In November 2010 Skadden advised Russian retailer O’Key Group on its £267m IPO, with Linklaters advising the banks. Skadden was also retained by Rusagro for its £202m IPO in April 2011. Russian firm Liniya Prava advised on the Russian side and Cleary Gottlieb Steen & Hamilton advised the banks.

It was Cleary’s turn to take the lead in November 2010 for Mail.ru’s £630.7m IPO, with Sullivan & Cromwell advising the banks. The firm was also picked to advise Russian property firm Etalon Group on its £353.96m IPO in April 2011, with Linklaters advising the banks.

In August 2011 Latham, Cypriot firm Antis Triantafyllides & Sons and Ukrainian firm Vasil Kisil & Partners advised HMS Hydraulic Machines & Systems Group on

its £231.2m IPO. Cleary advised the banks.

However, the data does not show which firms were retained for the large number of IPOs that have been postponed in recent years due to unfavourable market conditions, including steel pipe maker ChelPipe, OAO Koks and Moscow’s Domodedovo airport operator DME.

The data does, however, show that Freshfields was retained to advise Nordgold on its proposed IPO before it was postponed in February 2011, with Linklaters advising the banks.

 

Privatisation programme

In a bid to kick-start the economy, in 2011 the Russian government launched a privatisation programme that includes plans to relinquish both minority and controlling stakes in state-owned companies. However, many are struggling to find investors and list at an agreeable price. Russia’s largest bank Sberbank was set

to launch a secondary public offering last year, but, like many other Russian companies, had no choice but to delay its plans due to unfavourable market conditions. However, with the market starting to bounce back, the stage could

be set for more Russian IPOs in London this year.

Top five Russian IPOs of 2011

Clifford Chance advised Nomos Bank on its $782.2m (£493.8m) IPO. Freshfields Bruckhaus Deringer and Latham & Watkins advised the banks

Freshfields advised Global Ports Investment on its £359.3m IPO, with Clifford Chance advising the banks

Cleary advised Etalon Group on its £353.96m IPO. Linklaters advised the banks

Clifford Chance acted for PhosAgro on its £243m IPO. Linklaters acted for the banks

Latham & Watkins, Cypriot firm Antis Triantafyllides & Sons and Ukrainian firm

Vasil Kisil & Partners advised HMS Hydraulic Machines & Systems on its £231.2m IPO. Cleary advised the banks