Ukraine IPOs to reach $3bln in 2008
Dragon Capital, Ukraine\'s top investment bank, expects initial public offerings from the country to more than double to $1.5 billion in 2007 and to reach $3 billion next year.
The Kiev-based investment bank, which accounts for about one-third of Ukraine\'s equity capital markets transactions, has completed seven IPOs this year, raising $500 million in total.
The Ukrainian IPO market began stirring at the end of 2004 when hydrocarbon firm Regal Petroleum went public on the London Stock Exchange.
Last year, Ukrainian issuers raised a combined $482 million via initial public offerings. \"The pipeline is so full that we need more people to examine the deals,\" Brian Best, an investment banking director at Dragon Capital told Reuters after attending the Ukraine Capital Markets Forum in London on Wednesday.
He plans to add seven staff members in his department this year, bringing the number of investment bankers at the firm to 20.
\"We expect IPO volumes to increase to $3 billion next year as there will be more $1 billion plus deals,\" said Best.
Market watchers are expecting those multi-billion international offerings in the next 12 months.
System Capital Management (SCM), the country\'s biggest conglomerate and owned by Ukraine\'s wealthiest man Rinat Akhmetov, is considering a flotation on the London Stock Exchange or the New York Stock Exchange .
Its metals and mining unit Metinvest Holding plans to tap capital markets in London or Warsaw next year.
Serhiy Taruta, chief executive of the Industrial Union of Donbas, announced the firm\'s IPO plan last January.
Since the \"Orange Revolution\" uprising in 2004, more than 20 small and medium-sized companies have gone public, many of them on London\'s Alternative Investment Market (AIM).
The mass pro-Western \"orange\" protests helped overturn a rigged presidential poll.
Last year, Astarta-Kyiv , one of Ukraine\'s biggest sugar producers, became the first Ukrainian firm to list on the Warsaw Stock Exchange, raising $30 million for a 20 percent stake sale.
In the past 12 months, Ukraine equities outpaced the average dynamics of emerging markets, with Ukraine\'s leading PFTS index rallying 157 percent.
Best expects more mid-sized deals to come as Ukraine heads for World Trade Organisation admission.
Analysts expect some 60 companies to float in the next two years.
Ukrainian agriculture and food holding company Myronivsky Khlibproduct, for example, announced in December it intended to sell off about 20 percent of its stake in a $150 million international IPO.
Dragon Capital is working on three to four private placement deals this year, aiming to raise a combined $300 million.
\"Investor appetite is still strong for Ukraine deals. The credit crisis doesn\'t have a huge impact, as investors look for high yields and fast growth,\" said Best.