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  Kommersant, Yulia Garaeva  

TAIF up to go public // The Group announced its plans to carry out IPO in several stock exchanges simultaneously


Yesterday TAIF Group again reminded of its plans to carry out IPO. Through placement of 10 – 23% of shares in Russian, European and East Asian stock exchanges PSC “TAIF” expects to partially finance an investment programme with overall cost of RUB 355 billion. Experts say a serious work must be done on the company’s structure transparency before the campaign starts – as of today TAIF remains among the most non-public Russian companies.

Yesterday at the Annual Meeting of Shareholders the head of PSC “TAIF” Mr. Albert Shigabutdinov announced the company’s plan to carry out IPO (initial public offering of shares in a stock exchange). The time frame to bring TAIF to stock exchange is not revealed. At the present time, according to Mr. Shigabutdinov, negotiations are conducted with existing shareholders on the size of additional emission. Investors will be offered from 10 to 23% of the company’s shares. “IPO will take place in several stock exchanges simultaneously – in Russia, Europe and East Asia” – Mr. Shigabutdinov added.      

TAIF Group is the largest private structure in Tatarstan comprising 65 companies operating in the areas of petrochemicals and gas and oil processing, telecommunications, construction, finances and investments, services and trade.  The biggest assets controlled by the Group are OJSC “Kazanorgsintez”, OJSC “Nizhnekamskneftekhim” and PSC “TAIF-NK”. The Group’s shareholders are not disclosed. It is known that one shareholder is a son of Tatarstan ex-president Mintimer Shaimiev – Radik. In 2009, the Group’s revenue amounted to RUB 257 billion, and the net profit – RUB  19 billion.  According to the results of the first quarter of 2010 the Group earned RUB 77 billion as revenue and its net profit amounted to RUB 5.5 billion (versus RUB 4.6 of loss in the first quarter of the last year. )    

TAIF Group considers IPO to be one of the financing sources for its investment programme till 2017 to the amount of RUB 355 billion. The main investment objects are TAIF-NK’s Heavy Residue Conversion Complex at the cost of USD 2.4 billion (almost RUB 70 billion), a new polyethylene production plant with the capacity of 1 million tons per year at Nizhnekamskneftekhim  (the project configuration is being reviewed, see “Kommersant” dated April 16) and construction of a unit producing up to 200 thousand tons of ethylene and 50 thousand tons of  benzene per year at Kazanorgsintez . “Today the financial resources owned by TAIF are not enough in order to implement the projects planned”, explained Mr. Shigabutdinov. Various sources are being worked out, including attracting of portfolio and project investors.

Earlier, TAIF already announced its plans to carry out IPO. It was thought initially that the placement would be held in 2008 – 2009 and the investors would be offered up to 25% of the company’s shares. From the technical point of view, according to Mr. Shigabutdinov, TAIF was ready for IPO as early as at the end of 2008, however the shareholders found it reasonable not to execute offering until 2011. As of the middle of 2008, according of the data of its General Director, the company cost not less than USD 14 billion (RUB 406 billion – “Kommersant”). Today, in experts’ opinion, it may cost “three times less”.  

Experts agree that IPO is a good tool for attracting investments, but they evaluate the company’s perspectives of placing its shares differently. “Of course, crisis provided a strong impact on TAIF. Now the Group is recovering. It has a lot of expensive debts, but the top management wants to continue the investment program. In this situation, additional emission would be a solution”, an analyst of “Troika Dialog” Mikhail Ganelin says.  “I doubt that the share offering by TAIF will be of any interest to investors in the nearest future. This is a little-known company in the market”, a lead analyst  of “Uralsib Capital” Mr. Viktor Mishnyakov notes. “Currently the market is waiting for more significant SPO (second public offerings)”. “Probably, it is reasonable to bring to the market only petrochemicals as the most attractive asset. Now these are modern productions, which the market really needs”, Mr. Ganelin adds.  A lead expert of a management company “Finam Management” Mr. Dmitry Baranov does not expect TAIF promptly doing IPO.  However he supposes this is a right step as IPO “may allow finding a strategic investor who will not only give money but also can share contemporary technologies”.   
At all that the experts stress that in order to carry out IPO TAIF will have to thoroughly work on increasing of its transparency. On the basis of the results of 2008, according to Forbes, TAIF held the second position in the list of the biggest non-public Russian companies. “TAIF has to work on the corporate governance structure and become more open to investors”, Mikhail Ganelin says.  However Mr. Shigabutdinov assured that “ even today the company is ready to disclose all the information in accordance with the international standards and reveal the situation and the perspective to everyone who will want to become a new shareholder”. “We will ensure full transparency”, he stressed yesterday at the press-conference on the results of the Annual Meeting.    



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