PBN RELEASES QUARTERLY REVIEW OF RUSSIAN & CIS IPOS

London, Moscow, Kyiv & Almaty – In Q3 2008 capital raised through initial public offerings (IPOs) by companies from Russia and other nations of the Commonwealth of Independent States (CIS) fell to the lowest level since 2004, according to research issued by The PBN Company, the strategic communications consultancy. Q3 2008 raised the smallest amount of capital of any quarter with CIS IPO activity since VimpelCom’s flotation in 1996.

Only one CIS company – Acron, a Russian fertilizer company – floated in Q3 of this year, raising only $2.7 million in a dramatically reduced, technical offering. This contrasts with the $1.1bn raised in Q2 and the $566m raised in Q1 of 2008. Acron’s IPO is the smallest CIS IPO to date in terms of capital raised.

“As Russia and the CIS have begun to feel the full effects of the global financial crisis, companies are postponing their offerings as they await more hospitable market conditions. To date we know of 43 companies that postponed or pulled their flotations this year,” said Peter B. Necarsulmer, Chairman & CEO of The PBN Company. “Given that market recovery is increasingly improbable through the end of the year, we are unlikely to see more than a handful of IPOs at most – and even that is probably optimistic.”

“Although there are approximately 120 companies believed to be considering flotations in the next 5 years, this is very dependent on the ability of the global and domestic markets to recover their liquidity and investor confidence,” Necarsulmer added.

The region’s IPO activity in Q3 2008 featured the following:

Completed Deals Q3

In addition to this IPO activity, Razgulay, the Russian grain producer that floated on Russian exchanges in 2006, raised $295.2 million in an additional share sale on 21 July. NYSE-listed Mechel, which raised $335 million in a 2004 IPO, announced that its public offering of new preferred shares, announced on 24 June, was postponed.

Download the Quarterly Russia and CIS IPO Review - Issue 3.

About The PBN Company

The PBN Company is the leading strategic and financial communications and government relations consultancy with a focus on Russia & the CIS. Its IPO Pioneers series of research products, available on its website (www.pbnco.com), provides an annual in-depth survey of all flotations by CIS companies. The most recent volume, IPO Pioneers 3, is a comprehensive review and analysis of all 33 Russian, Ukrainian and Kazakh IPOs in 2007. PBN’s IPO research is also available on Bloomberg Professional under the ticker PBNC.

The company has offices in Almaty, Kyiv, London, Moscow and Washington DC. In 2007 The PBN Company advised on the IPOs of Bank Saint-Petersburg, Ferrexpo, M.video and MMK. PBN was named joint winner of the IPO Communications Advisor of the Year award at the 2007 Russian IPO Olymp Awards, organized by the Stock Market and Management Institute (IFRU).

PBN’s recent clients in the region include Alliance Bank of Kazakhstan, Baltic Beverages Holdings, Bank Saint-Petersburg, Basic Element, BP, Chagala Group, Citigroup, Deutsche Bank, Dragon Capital, Enel, Ferrexpo, Horizon Capital, Knight Frank, Merrill Lynch, Motorola, M.video, Nordstream, Pepsi, Pharmacy Chain 36.6, PricewaterhouseCoopers, Renaissance Group, Rolf Group of Companies, Rosneft, Sberbank, Sony Pictures, Telenor and UkrEximBank.

In 2007 PBN was named Eastern Europe Consultancy of the Year by The Holmes Report and became a member of the WPP group of companies.