The owners of Russian toy retailer Detsky Mir, Sistema and the Russia-China Investment Fund (RCIF) said on Friday they were aiming to reduce their holdings in the company by offering existing shares via a secondary public offering (SPO) set for next week, Reuters reports.
In a joint statement, Sistema and RCIF said the offering, during which both plan to sell at least 150 million of existing shares in Detsky Mir, was aimed at meaningfully increasing the free float and trading liquidity of the firm.
Sistema currently owns 52.1% of the toy retailer, and RCIF – a joint investment fund of Russian Direct Investment Fund and China Investment Corporation – controls another 14%. The remaining 33.9% of shares are free-floating.
Books will be opened on Nov. 18 and closed on or about Nov. 21, the statement said. Post-SPO, Sistema will retain no more than a 36% stake, and RCIF no more than a 9.7% stake, respectively. Goldman Sachs, UBS, Sberbank CIB and VTB Capital are arranging Detsky Mir SPO.
Sistema said it was considering using part of the sale proceeds for potential debt reduction. The statement did not say how much both investors planned to raise from the offering, a rare example of an equity placement this year in Russia.
The number of initial public offerings, as well as SPOs, has drastically fallen in Russia after Western sanctions were imposed on Moscow in 2014 over its role in the Ukraine crisis, as foreign investors started to reduce their exposure. Russia denies any wrongdoing, calling sanctions unfair and aimed at undermining its global competitiveness.
Since 2014, Moscow has started to pay greater attention to attracting domestic funds, including from private investors, into its equity market.