Russia’s Biggest Rail Transport Company Delays IPO

Russian rail operator RusTransCom has postponed a planned initial public offering (IPO), the company said in a statement, according to Prime news agency. The company said it had “received several proposals regarding private equity transactions, which are better aligned with the Group’s development strategy.”

Rustranscom, the largest player in Russia’s rail freight business, mainly transports grain, mineral fertilizers, and timber. It had planned to launch an IPO on the London Stock Exchange and raise $300 million, which would have been the first listing by a Russian company in almost two years on the LSE.

RusTransCom’s parent company is Molesto Investments, owned by Konstantin Sintsov and Konstantin Zasov, which holds 95.7 percent of the rail transport operator. The freight company had put two independent directors on the board ahead of the IPO — Marcus Rhoads, formerly at Ernst & Young and Will Ebott, formerly of BoA Merrill Lynch, Renaissance Capital, VTB Capital, and Deutsche Bank/UFG.

RusTransCom operates 68,000 freight cars, more than half of which are for the transportation of grain. In 2018 the company transported 60.7 million tons of grain, made revenues of $795 million, net profit of $179 million and had an Ebitda margin of 60 percent.

Since the start of 2019, there have been a number of IPOs on the Russian equity market, after no deals since August 2018. But the postponement of the RusTransCom IPO along with the earlier canceling of a Secondary Public Offering (SPO) by meat major Cherkizovo, show the trend may be faltering.