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CAPITAL MARKETS

Russian equity: OGK-1 powers up share offering

Deal resumes Russian equity issuance; Proceeds earmarked for capex programme

Russia’s biggest electricity generator, OGK-1, is set to hit the road in October to market a 38-billion-share issue to investors. Goldman Sachs and Troika Dialog are lead managing the planned secondary public offering, which will amount to 85% of the company’s outstanding share capital. Although part of the deal will be sold to existing strategic investors, OGK-1 recently secured permission from the Federal Securities Commission for a foreign listing of up to 7.2 billion shares in London. The firm’s Moscow-listed shares in late September were trading at $0.035 apiece, up 46% year to date. On a 12-month view most analysts see around a 25% upside to the share price.

Big stakeholders include grid operator FSK (40%) and RusHydro (23%), whose holdings are managed by state power holding company InterRAO. InterRAO has indicated that it will subscribe to roughly 20 billion of the new shares in the planned transaction, which will mark a further resumption of equity market transactions this year by Russian entities.

amount Micex is up this year

Although the Russian economy has staged a fairly strong recovery from last year’s recession – GDP is forecast to grow by 4.5%

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