Magnitogorsk Iron and Steel Works, Russia's third-largest steel maker, today set the price range for its international share float at $12.25-$15.50 per global depositary receipt.
Magnitogorsk already has a small free float in Russia, but plans to issue GDRs, each equivalent to 13 ordinary shares, in London and ordinary shares, with a price range of $0.94-$1.19, in Russia.
The company, also known by its Russian initials MMK, aims to raise around $1 billion through the offering of new shares, a banking source told Reuters. The company has hired ABN Amro, Morgan Stanley and Renaissance Capital as lead managers for its international float.
Bankers involved in the IPO have valued MMK at between $9.7 billion and $13.6 billion based on its existing market capitalisation of about $11.5 billion. Alfa Bank said in a note MMK was trading at 5.7 times EV/EBITDA (enterprise value to earnings before interest, tax, depreciation and amortisation), in line with the Russian steel sector average.
"The valuation close to the current market one is quite fair," the bank said.
