Qiwi Selling Shares as Ukraine Tension Eases
Qiwi Plc’s (QIWI:US) planned $403 million
secondary share sale is the first major equity offering by a
Russian company since President Vladimir Putin’s incursion into
Ukraine triggered a rout in the stock market.
American depositary receipts of Qiwi sank 7.6 percent in
New York June 10 after it announced the sale. The operator of
payment terminals, which has surged 65 percent since an April
low, said it may use the proceeds for acquisitions. The
Bloomberg index of the most-traded Russian companies in the U.S.
advanced yesterday as OAO Gazprom gained while Qiwi rebounded
1.5 percent. Russian markets are closed for a holiday today.
There hasn’t been a completed share sale by a Russian
company since February, when retailer Lenta Ltd.âs (LNTA) initial
public offering in London raised $952 million, according to data
compiled by Bloomberg. Investor demand for Russian assets dried
up after Putin annexed Ukraine’s Crimea region in March. Tension
between the two countries has calmed in recent weeks, with the
head of the Organization for Security and Cooperation in Europe
saying June 10 that peace talks are progressing.
“Now the door is open again as international investors
believe that the conflict in Ukraine won’t escalate and a
compromise of some sort is likely after a new president was
elected in Kyiv,” Kingsmill Bond, Moscow-based chief strategist
at Sberbank, said by phone yesterday.
Early Investors
Billionaire Alisher Usmanov’s Mail.ru Group Ltd. (MAIL) will be
selling stock in the offering as will Qiwi Chairman Boris Kim
and other early investors, according to a prospectus filed June
9. A total of 7.97 million American depositary shares will be
sold. Chief Executive Officer Sergey Solonin isn’t among the
selling shareholders, Varvara Kiseleva, Qiwi’s investor
relations officer, said by e-mail.
“The market has recovered and they try take advantage of
this window,” Ian Hague, founding partner of New York-based
Firebird Management LLC, which manages $1.1 billion of assets
including Russian stocks, said by phone yesterday.
The Cyprus-based company, which operates an online wallet
service co-branded with Visa Inc. (V:US), said in the filing that it
may use the proceeds from the sale for mergers and acquisitions.
“The situation in Ukraine and the U.S., EU and other
sanctions that have been imposed could adversely impact our
operations and financial condition,” Qiwi said in the filing.
Sanctions by the U.S. and the European Union include travel bans
and asset freezes for Putin allies.
Credit Suisse Group AG (CSGN) and VTB Capital will manage the sale
along with William Blair Co. and Atonline Ltd.
Qiwi spokeswoman Yuliya Mansurova declined to comment
yesterday when asked about the share sale.
Income Surge
Billionaire Vladimir Evtushenkov’s children-goods retailer
Detsky Mir Group postponed a planned London share sale because
of tension over Crimea, people familiar with the matter said
March 13. German retailer Metro AG (MEO) said the same month it would
delay the IPO of its Russian Cash Carry business due to market
turmoil.
After raising $213 million in May 2013, Qiwi sold $288
million in a September offering. The company’s net income will
surge 31 percent to 2.8 billion rubles ($82.8 million) this
year, according to the average of nine analyst estimates
compiled by Bloomberg.
The Bloomberg Russia-US Equity Index gained 0.5 percent to
93.12 and futures on the RTS Index added 0.6 percent to 137,110
in U.S. hours. Qiwi closed at $44.29.
Gazprom advanced 1.1 percent to $8.52. OAO Surgutneftegas
climbed 2 percent to a seven-year high of $8.18 and OAO Lukoil
rose 1.9 percent to $61, the highest since Jan. 3.
Gas Deadline
Gazprom moved its deadline for Ukraine’s gas debt repayment
for a third time this month, giving the EU, which depends on
Russian gas supplies via Ukraine for about 15 percent of its
shipments, more time to help reach an agreement. EU Energy
Commissioner Guenther Oettinger said yesterday that the parties
“will try to make progress” in the next 48 hours.
Brent oil climbed as fighters from a breakaway al-Qaeda
group are in position to seize Iraqi energy infrastructure after
taking control of Mosul. Oil is Russia’s top export and along
with natural gas contributes about half its budget revenue.
The Market Vectors Russia ETF (RSX:US), the biggest U.S. exchange-traded fund that holds Russian shares, rose 0.6 percent to
$26.66. The RTS Volatility Index, which measures expected swings
in futures, added 2.6 percent to 25.88.
To contact the reporters on this story:
Ilya Khrennikov in Moscow at
ikhrennikov@bloomberg.net;
Halia Pavliva in New York at
hpavliva@bloomberg.net
To contact the editors responsible for this story:
Nikolaj Gammeltoft at
ngammeltoft@bloomberg.net;
Kenneth Wong at
kwong11@bloomberg.net
Marie-France Han
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