Returned with profit

Severstal has determined the price for placing an additional share issue

Severstal announced yesterday that the board of directors that met the day before determined the price for placing an additional issue of 85 million shares with a par value of 0.01 rubles. For shareholders who have a pre-emptive right to repurchase, it is set at RUB 322.81. ($12.10) per share, for placement by public subscription - RUB 332.74. ($12.5). The same price was determined during the placement of shares on the London Stock Exchange on November 8.

The company explains that "the share price to shareholders exercising their pre-emptive rights is equal to the price per share at the time of public offering less certain commissions, fees and other expenses associated with the recent international offering of common shares and GDRs." Frontdeal and other companies under the control of the main shareholder (Alexey Mordashov - Ed. ), the statement says, “have fully exercised their pre-emptive rights to subscribe for shares of the additional issue.” Thus, Mr. Mordashov will be able to buy out about 80% of the placement volume through private subscription.

Analysts have mixed opinions about the fact that there is a difference, albeit small, between the private and public subscription prices. At the same time, they recognize the established price as adequate. According to Dmitry Parfenov from Prospekt Investment Group, Severstal objectively set the price for placing the additional share issue. He considers it quite acceptable that there is a difference between the price for a closed subscription and the price for other market participants, noting that even the price set for the main shareholders turns out to be higher than the market price, which was $11.6 yesterday.

But Aton group analyst Dmitry Kolomytsyn believes that “it would be better if this difference did not exist.” “The gap in prices suggests that Severstal remains what it was, and so far its management is frustrating its investors and does not think about the good of the corporation,” he believes.

At the same time, the placement of an additional issue is intended, in particular, to return to the company the money received during the IPO. After all, the placement was carried out with shares of the Frontdeal company, owned by Mr. Mordashov. And in fact, it was not Severstal that received the money from the placement, but the placing shareholder. Now, as a result of the redemption of the additional issue, which is actually equal in volume to the placement, the money will be returned to the company. Therefore, it is not advisable to set the price lower when the market price of shares has already fallen during the week of trading.

In addition, the board of directors of Severstal decided to pay dividends for the third quarter in the amount of 2 rubles. (or $0.074) per share and GDR (each represents one share. - Ed. ). The total amount of payments for the quarter will be about $70 million. At the same time, the register of shareholders entitled to dividends will close on November 16. This means that dividends will be received by new shareholders who purchased securities during Severstal’s IPO a week and a half ago.

Anna LANDER