Published: November 28, 2012
Russia’s second-largest mobile operator priced at the bottom of its target range.
The IPO by MegaFon, Russia’s second-largest mobile operator, has raised US$1.7bn. This equates to US$20 per global depository receipt (GDR), the bottom end of the company’s US$20-25 guided range. The outcome of the offering, carried out in London and Moscow, will come as a disappointment to MegaFon’s controlling stakeholder, Russia’s richest man Alisher Usmanov.
The offering has faced difficulties from the start. Concerns over corporate governance reportedly led Goldman Sachs to withdraw from the deal and caused the company to appoint to its board Lord Myners, a former UK treasury minister, to ease fears.
The firm’s share price fell to US$19.75 in its first few minutes of trading and had fallen as low as US$19.53 during the morning period. Although this points to low demand, it is also in line with the uniform decline of global stocks due to fears surrounding the slow progress of US budget negotiations.