EuroSibEnergo (ESE), the power unit of Russian oligarch Oleg Deripaska's energy and resources conglomerate EN+ Group, plans to relaunch its shelved Hong Kong initial public offering next year while it pushes ahead with feasibility studies on proposed power projects in Siberia with China Yangtze Power.
Russia's largest privately owned power producer is also holding discussions with environmental groups to address their concerns about potential damage to the environment from the planned damming of ecologically sensitive rivers in East Siberia, according to EN+ deputy chief executive Jivko Savov - although two such groups deny having been consulted.
'Certainly next year is on the cards, but I don't have a specific date,' Savov said of the listing. 'Globally, investors are taking a wait-and- see stance. Our IPO is not driven by external factors so we can [wait].'
The company shelved its IPO in November last year and again in March this year, due to a lack of interest in the firm's shares at its offer price, and unfavourable regulatory changes in Russia's power market. It had hoped to raise up to US$1.5 billion, much of which was intended for the retirement of a US$1.4 billion loan owed to Russia's Sberbank.
A successful float would allow it to restructure debt and cut hefty interest rates on a five-year loan refinancing agreement signed during the 2009 global financial crisis. It was estimated by listing underwriter BOC International to have a net debt-to-shareholders' equity ratio of 146 per cent at the end of last year.
According to another underwriter, VTB Capital, the interest rate on the loan was to rise from five per cent last year to eight per cent this year and to 19 per cent next year before falling gradually to 11.3 per cent in 2015. The bank was also entitled to up to an extra one per cent per year on the loan amount as long as the aluminium price exceeded US$2,000 a tonne - as it has for most of the time since the refinancing. Aluminium smelters are a major customer.