* Company expected to raise around $500mln-sources
* IPO will follow rival Globatrans which went public in 2008
* Roadshow to start Jan 28-source
By Megan Davies and Olga Popova
MOSCOW, Jan 15 (Reuters) - NefteTransService, one of Russia’s biggest private freight rail operators, hopes to raise around $500 million via a London listing, sources said, that it will then use to expand into Ukraine and Kazakhstan as the markets open up to competition.
Two sources with knowledge of the placement said the company expected to offer around 25 percent of its shares. The company confirmed its intention to float but did not disclose the amount it aims to raise.
The IPO will follow rival Globaltrans, which went public in 2008 and raised $450 million last year in a share sale in order to give it added firepower for acquisitions.
Kazakhstan and Ukraine, as well as having significant cross-border cargo flows with Russia, have similar infrastructure and regulation and are also undergoing rail sector reform.
A decade ago, Russian cargo owners relied on state-owned monopoly Russian Railways as the main fleet operator, but now more than 70 percent of the country’s freight fleet is privately owned, according to a 2012 presentation by Globaltrans.
NefteTransService’s offer is expected to be completed in the first half of 2013, the company said. A roadshow for investors is to start on Jan. 28, one source said.
Europe’s IPO market, which has been struggling amid the region’s debt crisis and sluggish economic growth, started to show signs of life again in the final months of 2012 as investor confidence improved. Russia’s second-biggest mobile phone operator MegaFon raised $1.7 billion in its November listing and is now trading more than 25 percent above the price at which it floated.
While the IPO market’s recovery remains fragile, the lack of activity through much of last year has left a backlog of deals which could come to market in 2013, bankers have said.
This month has already seen German residential property group LEG and Polish real estate holding firm PHN unveil plans to list. [ID: nL5E9C70OO] [ID: nL6N0AJ2SX]
NefteTransService plans to expand its fleet through making acquisitions and is looking for opportunities to buy the rail transportation units of large Russian industrial groups and other rail freight operators.
In November it won an auction to buy rail operator Evraztrans from steelmaker Evraz.
Other recent deals in Russia’s rail freight market include investment and trading group Summa buying transport group Fesco and steel magnate Vladimir Lisin agreeing to buy rail cargo operator Freight One.
NefteTransService was founded in 2006 by Vadim and Vyacheslav Aminov. Last year, the company was the country’s largest private railway operator, measured by the amount of cargo transported in Russia.
It handled 71.1 million tonnes of cargo - more than the 9.6 million tonnes transported by Russian freight operator Globaltrans Investment, which raised over $500 million in a share sale in July.
NefteTransService cites Anglo-Russian crude producer TNK-BP , coal miner SUEK and steel producer Mechel among its key customers.
JP Morgan, Morgan Stanley and Renaissance Capital are acting as joint global coordinators and joint bookrunners for the offering.