UPDATE 2-Russian coal miner Sibanthracite says plans London IPO

Tue Jun 18, 2013 11:15am EDT

* Could raise up to $200 mln from 25 pct stake - sources

* Plans to raise stake in global anthracite market to 17 pct

By Megan Davies and Alessandra Prentice

MOSCOW, June 18 (Reuters) - Russian niche coal miner Siberian Anthracite plans to list its shares in London and could raise up to $200 million, two market sources said, but it may struggle to attract investors at a challenging time for coal producers.

Sibanthracite did not disclose how much it was planning to raise through the offering of 25 percent of its shares, but based on the estimate from the sources, the initial public offering would value the company as high as $800 million.

Russian coking and thermal coal exporters have come under pressure in 2013 as a drop in coal prices to over four-year lows and high transport costs have undermined their competitiveness.

"The timing is a bit awkward now that international coal prices are hitting their lowest level for several years. Everything depends on how realistic the firm's expectations are on the valuation. They will need to be willing to give some upside to investors," said Societe Generale analyst Sergey Donskoy.

Sibanthracite mines a rare form of coal in the central Siberian region of Novosibirsk - ultra high grade anthracite (UHG), which can be used as a substitute in steelmaking for coke made from baked coking coal.

Sibanthracite Chief Executive Dmitry Shatokhin said the firm, which exports 90 percent of its output, was "well positioned to benefit from rising demand for high-quality anthracite".

UNDER PRESSURE

The firm plans to increase its share of the global anthracite market to 17 percent this year from 15 percent in 2012, focussing on Asia-Pacific markets and China in particular, Shatokhin said in an interview last week.

The selling shareholder is GLG Emerging Markets Growth Fund, the company said in Tuesday's statement. Of the 25 percent being offered, 20 percent is being reserved for existing shareholders of GLG Emerging Markets Fund.

"They will need to emphasise that they are a niche coal producer," Renaissance Capital analyst Boris Krasnojenov said.

"But the question is whether anthracite is going to hold this year at the same high level if there is no recovery in regular coking coal prices," he said, estimating that anthracite was trading at a 3,000 rouble ($94.44) premium to high-grade coking coal.

The miner's 2012 net profit was $117 million, a 22 percent increase from the previous year, with a net profit margin of 23 percent, according to a statement. Revenue for 2012 was $508 million.

After a slow start to the year for equity offerings, a number of Russian companies are planning IPOs, including VTB Capital, Tinkoff Credit Systems (TCS) and hypermarket chain Lenta, according to sources.

JP Morgan, Morgan Stanley, Raiffeisen Bank and Sberbank are acting as joint coordinators and bookrunners for the Sibanthracite offering.

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