February 9, 2018 / 11:53 AM / 8 months ago

Russia's TMK halts IPO of U.S. unit, shares fall

MOSCOW (Reuters) - Shares in Russian oil and gas pipemaker TMK (TRMK.MM) fell sharply in Moscow on Friday after its U.S. subsidiary IPSCO Tubulars halted a share sale late the previous day, citing adverse market conditions.

TMK (TRMK.MM) was the MOEX index’s .MCX worst performer, falling 3.8 percent and touching their lowest since Jan. 17.

IPSCO suspended an initial public offering (IPO) on the New York Stock Exchange, through which IPSCO and TMK had aimed to raise between $465 million and $535 million as a sharp global selloff in shares from record highs continued.

“While we received significant interest from potential investors, the continued market and economic volatility are not optimal conditions for an initial public offering,” IPSCO’s chairman and CEO Piotr Galitzine said in a statement.

IPSCO did not elaborate further. It is one of the largest North American producers of welded and seamless pipe for the oil and gas industry, with headquarters in Houston, Texas.

It halted its deal as the selloff in global stock indexes deepened on Thursday, with the fall in U.S. stocks confirming a correction for the market, in another volatile session stirred by concern over rising bond yields.

“So far they have only postponed, not canceled it (the deal),” BCS investment bank analyst Oleg Petropavlovskiy said.

“Everything will depend on the state of the U.S. stock market. They can return with this deal if the volatility ends.”

Friday’s fall in TMK, Russia’s largest maker of steel pipes, was the share’s worst in a single day since Dec. 18. In London, TMK Global Depositary Receipts (TRMKq.L) fell 5 percent.

News of the IPO of its U.S. division had been a major catalyst for TMK shares in recent months, analysts at VTB Capital said in a note. The IPO was almost fully priced into TMK’s value, BCS added.

TMK, controlled by Russian businessman Dmitry Pumpyansky, declined to say whether and when it would come back to the deal.

A day after IPSCO launched the sale in late January, Pumpyansky was included on a list of Russian “oligarchs” identified by the U.S. Treasury Department as being close to President Vladimir Putin.

The list of 210 prominent figures in Russian business and politics was drawn up as part of a sanctions package signed into U.S. law in August last year although the document said inclusion did not mean those named were likely to be sanctioned.

The steel pipe sector has so far been unaffected by Western sanctions first imposed on Russia in 2014 over Moscow’s annexation of Crimea from Ukraine.

Reporting by Polina Devitt and Zlata Garasyuta; writing by Vladimir Soldatkin, Polina Devitt and Polina Ivanova; Editing by Catherine Evans

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