Globaltrans set for LSE listing
Financial Times: April 5 2008
By Robert Wright, Transport Correspondent
Globaltrans, Russia's largest private rail freight operator, plans to list on the London Stock Exchange in a deal that could raise about $200m (£100m) in fresh capital and value the company at about $1.3bn.
Existing shareholders in the company - which made a $128m operating profit in 2007 - expect to raise another $200m by selling about 18 per cent of the existing shares, according to people familiar with the transaction.
Globaltrans is 70 per cent- owned by N-Trans, Russia's largest transport company, formerly known as Severstaltrans, while Globaltrans' management hold the remaining 30 per cent.
The train operator - which operates 21,000 wagons and 19 locomotives - is the latest Russian company to list on the LSE after several years when they have been buoyed by strong economic growth and drawn to London to avoid the bureaucracy of New York's stringent rules.
Proceeds from the listing will be used to expand Globaltrans' fleet of wagons and locomotives, which mostly carry high-value steel and oil products.
Sergey Maltsev, chief executive, said listing would give the company new options for financing. "These new financing options result in new options for future development," he said.
In the past five years, Russia has liberalised access to its state-owned rail network, the world's second longest by route length. Private companies can own wagons, use their own locomotives over short distances and request haulage over longer distances from Russian State Railways.
The Russian state had decided to concentrate on developing the more profitable rail infrastructure, while leaving the substantial investment required in locomotives and rolling stock to private companies, Mr Maltsev said.
The desire to encourage private sector rolling stock investment meant it was in a different position from Russian companies such as Yukos, the oil company, which had suffered from Russian government interference, Mr Maltsev said. Globaltrans was also close to government bodies that set policy for rail liberalisation.
"Whatever the changes, the movements, in the industry are, we always know about them first," he said.
Globaltrans could also benefit from having been set up as a private company, rather than privatised. Many of the worst experiences for investors in Russia have been in privatised companies whose privatisation was re-examined by the state.