Accord-Invest claims IPO of Magnitogorsk Metallurgical Industrial Complex fails expectations

‘The results of the public offering launched by Magnitogorsk Metallurgical Industrial Complex appear to be rather controversial. On the one hand, the company did achieve its goal of offering a certain number of shares, but on the other, the shares were offered more cheaply than the in the course of regular transactions, which is why they dropped by almost 5% at MICEX the next day. All in all, this IPO failed our expectations, although the prices could actually be even lower,’ Director of Ural subsidiary of Accord-Invest Investment Company Konstantin Selyanin said to UrBC.

Magnitogorsk Metallurgical Industrial Complex managed to get as much as $1 billion through a public offering at London Stock Exchange; the buyers were offered 80 million GDRs for 1.04 billion shares for $12.5 per receipt or $.961538 per share, so the share price was actually 7.7% lower than that used at RTS and MICEX the day before. The company’s capitalization amounted to $11.22 billion. The share price decreased by 7.21% and by 5.6% at RTS and MICEX, respectively.

‘The company’s stock definitely failed to hit the highest price range, and the reason for this is too many shares in the metallurgical market segment: this turned out to be only one IPO out of many,’ Mr. Selyanin explained.