Russian petrochemicals giant Sibur is waiting for its huge new plant in western Siberia to be launched before conducting its initial public offering, which means the IPO will not happen until this autumn, banking sources close to the deal told Reuters.
The move, estimated to raise as much as $3 billion, was initially planned for last year, but it was postponed as fresh U.S. sanctions coupled with general global market volatility deterred Russian companies from offerings in 2018.
The complex Sibur is building in western Siberia, known as ZapSibNefteKhim, will be one of the world’s five biggest petrochemical plants. It is seen as 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 tons of ethylene and 500,000 tons 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.
Russia’s richest man, Leonid Mikhelson, who heads a major shareholder in Russia’s biggest gas producer Novatek, owns 48.5 percent of Sibur. The company is the largest petrochemicals producer in Eastern Europe.
Mikhelson’s business partner Gennady Timchenko owns 17 percent, and China’s Sinopec and Silk Road Fund have 10 percent each.
