March 15, 2019 / 12:30 PM / 5 months ago

Russia's Sibur's IPO won't take place before autumn -bankers

MOSCOW, March 15 (Reuters) - Russia’s largest petrochemicals company, Sibur, does not plan to conduct its initial public offering (IPO) before this autumn, as it is waiting for its huge new plant in western Siberia to be launched first, four banking sources close to the deal said.

Last year Sibur was preparing an IPO that could raise as much as $3 billion, yet no Russian companies conducted offerings in 2018 amid fresh U.S. sanctions coupled with general global market volatility.

Sibur’s complex in western Siberia, known as ZapSibNefteKhim, will be one of the world’s five biggest petrochemical plants, part of plans by Russia to capture more value from the oil it produces.

ZapSibNefteKhim will have an annual production capacity of 1.5 million tonnes of ethylene and 500,000 tonnes of propylene, and is planned to be launched in the first half of this year.

“Everything is on hold. Investors want to see not even the launch itself but rather prospects of the plant reaching the full capacity,” one of the banking sources said. Another three sources confirmed autumn as a new possible IPO timing.

Two of the sources said the IPO could be pushed back to 2020, depending on how ZapSibNefteKhim is operating and depending on market conditions. Sibur declined to comment.

Leonid Mikhelson, head of and major shareholder in Russia’s largest gas producer Novatek, owns 48.5 percent of Sibur, the largest petrochemicals producer in eastern Europe.

Mikhelson’s business partner Gennady Timchenko owns 17 percent, and China’s Sinopec and Silk Fund have 10 percent each.

An industry source told Reuters earlier that Sibur preferred to list its shares only in Moscow, dropping plans for a London listing which was considered along with the Moscow Exchange earlier in 2018.

Mikhelson said last year an offering of 15 percent of Sibur in an IPO was rational. (Writing by Katya Golubkova; editing by David Evans)

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