The European Bank for Reconstruction and Development (EBRD) has acquired a 2.98 percent stake in Russia's leading container terminal operator Global Ports for $70 million in an initial public offering held by the company on the London Stock Exchange, the EBRD said on Wednesday.
"Today's $70 million EBRD investment demonstrates the bank's commitment to the development of Russian infrastructure and is part of a strategy to support companies seeking funding on international capital markets, particularly those active in key economic sectors where there is a significant requirement for long-term investments," the EBRD said.
Global Ports raised $534 million during the IPO, selling Global Depository Receipts at $15 per security. The offer price was set closer to the lower end of the company's price guidance of $14.70-16.10 per GDR. The IPO proceeds may rise to $588 million if the IPO managers exercise their option.
The company was valued at $2.35 billion.
"This is the first transport and infrastructure IPO from Russia and Eastern Europe since the 2008-2009 financial crisis, and its success shows the opportunities for private players to attract capital for modernization projects aimed at increasing capacity to handle growing cargo volumes," EBRD First Vice President Varel Freeman was quoted as saying in the statement.
The proceeds raised by Global Ports through the share purchase by the EBRD will be used for capital investments in Global Ports' infrastructure in Russia, including introducing more environmentally friendly and energy efficient equipment. Energy costs (fuel, electricity and gas) have a significant impact on the price formation of the group's products, the EBRD said.
Global Ports is part of Cyprus-registered Transportation Investments Holding Limited (TIHL), a private Russian transport and infrastructure group known under the brand-name N-Trans. In 2008, the EBRD invested $49.55 million in a 3.2 percent stake in Globaltrans Investment PLC, the Russian private rail operator controlled by N-Trans, during its IPO on the LSE, the EBRD said.