Eurocement Group, owned by Filaret Galchev, is likely to hold an IPO late 2011 or early 2012, Reuters reported quoting sources at investment banks and in the cement market.
The company plans to place up to 20% of its authourised capital at the IPO, according to Reuters. Lead-managers and the exchange haven’t been chosen yet, but it’s likely to be the London exchange, says Reuters. It is known to Kommersant’s sources in an investment bank and one of cement compaies that Filaret Galchev’s company is considering the possibility of the IPO. Eurocement Group neither confirmed nor disproved the information.
"This is just a declaration of intention. Eurocement seems to be sounding out and trying to decide on the ways of its further development," says one of Kommersant’s sources. Eurocement top-managers stated about a year ago that they were considering the IPO, says another investment banker.
The main purpose of the IPO is to reduce the debt load of Eurocement which is 7.5 times higher than EBITDA, says Mikhail Safin, an analyst at Renaissance Capital. He estimates the ceiling of Eurocement’s worth during the placement at about US%5.6-6bn, including the premium for the dominating position in the market. Finam analyst Dmitri Baranov agrees to such estimates. Thus, the company’s capitalisation less the debt may be US$3.6-4bn. The company will be able to raise about US$720-800m in case of placing 20% of shares.
Dmitri Baranov doubts that Eurocement will have enough time to prepare for the IPO even during a year since the structure of the company’s business was always closed to investors. "The announced time for the IPO is opportune, but the obscure structure of the business and the need to comply with the rigid requirements of the exchange may put off the placement," says Svetlana Andreeva, press secretary of BaselCement.