Russian operator receives orders for stock in London IPO

27 November 2012 | Kavit Majithia


Russian operator Megafon, which is submitting an IPO in London, has received orders for all shares of over a tenth of its stock by a single institution.

The news clears a major hurdle for the Russian deal, and it has been reported that shares worth up to $2.1 billion have been ordered.

This follows a two week campaign in which the operator targeted investors in the US, UK, Europe and Russia. According to the Financial Times, a fund placed orders of over $170 million, which could be the biggest bet on a Russian company IPO since 2010.

Shares are due to be priced today, and will trade tomorrow, after a three week postponement. The IPO has taken longer than expected to gain approval from the UK listing Authority.

There were also concerns on the Megafon deal after lead bank Goldman Sachs dropped out of the offering. The bank was reportedly concerned over an internal restricting of assets by Russian entrepreneur Alisher Usmanov.

Usmanov will retain a 50% stake following the IPO, with the primary seller being Nordic operator TeliaSonera, which will reduce its stake in Megafon from 36% to 25%.