Russia's Sovcomflot to List Shares in Moscow

Russian state shipowner Sovcomflot announced plans on September 15 to hold an initial public offering (IPO) of its shares on the Moscow stock exchange.

The company expects to raise $500mn from the offering, using the funds to invest in new projects and lower its debt. VTB Capital, Citigroup Global Markets, Sberbank CIB, JP Morgan and BofA Securities are serving as global coordinators and bookrunners.

According to Russia's finance ministry, up to a 25% stake in the company will be taken public, with the offering scheduled to take place in October.

"We are excited to begin a new chapter in the history of SCF," Sovcomflot CEO Igor Tonkovidov said in a statement. "The offering reinforces our position as a global leader in the maritime transportation of hydrocarbons and expands our access to international capital markets."

The 100% state-owned company, which earned $823mn in core earnings (Ebitda) last year, owns nearly 150 tankers, dry cargo ships and other vessels, including 15 LNG carriers. Its IPO was first proposed nearly two decades ago, and talks of the company's partial privatisation has ebbed and flowed ever since. 

Russian officials announced an offering in 2017, as part of a wider Kremlin drive to raise funds for the budget after two and a half years of low oil prices. But as oil prices rose and Russia's finances improved, the plan was shelved. The company's large debt pile at the time was also expected to deter investors. Sovcomflot's net debt to Ebitda ratio is now a "conservative" 2.7, it said, down from 5.63 in 2017.