Pipeliners

October 5, 2006 - The Moscow Times - Pipe producer TMK will list as much as 30 percent of its shares in London and Moscow in the "very beginning" of November, the company's chief financial officer said Wednesday. Depending on interest generated by TMK's road show for investors, the company will sell up to 21 percent of its shares on the London Stock Exchange and up to 9 percent in Moscow, CFO Vladimir Shmatovich said. Aton metals analyst Vladimir Katunin values TMK, the world's second-largest producer of seamless pipes, at just under $4 billion based on its 2006 earnings. UralSib bank values TMK at between $3.1 billion and $5.6 billion, depending on whether the company is compared to Russian pipe-producing companies or with international pipe makers such as Tenaris. The company declined to provide an estimated market value. "I'm pretty sure there will be demand for TMK since there is no Russian pipeline company trading internationally," Katunin said. "It should be quite interesting to investors." The demand for TMK's shares will depend on investors' view of the Russian stock market in general, as well as their assessment of the steel industry and the energy sector, which is TMK's primary customer. Most of the proceeds of the IPO will be used to repay a $780 million loan that the company's chief shareholder, Dmitry Pumpyansky, used to buy out other top shareholders. The remainder will be invested back into the company. Shmatovich said the IPO would not be constrained by Russian market conditions, because TMK is a "global" pipe producer, with 27 percent of its production sold overseas in 2005. "In the medium and long term, we want to increase it to 40 percent," he said.