MOSCOW, October 18 (RIA Novosti) - Severstal [RTS: CHMF], Russia's second largest steel maker, has been authorized to float 25% of its stock abroad in an IPO, the state financial watchdog said Wednesday.
The Federal Service for Financial Markets said it had authorized the placement abroad of 253.9 million common shares of Severstal, or 24.99% of company's charter capital.
The agency said in a statement the maximum authorized stake to be floated abroad could be capped at 27.28% if the company fails to place in full its additional issue, registered October 17.
Severstal said earlier it plans to list its global depositary receipts (GDR) and ordinary shares on the London Stock Exchange.
The placement will be organized by Frontdeal Limited, a Cyprus-registered company controlled by Severstal owner Alexei Mordashov.
Severstal sought a merger with the world's No.2 steelmaker Arcelor, but the deal, inked on May 26, fell through after it was rejected by Arcelor shareholders on June 30, to clear the way for a takeover of the Luxembourg-based company by the world's largest steel company Mittal Steel. Arcelor paid Severstal 140 million euros (about $180 mln) in compensation.
Mordashov said his company plans a future merger with a big partner in the sector, but only if it is beneficial for shareholders.
Severstal said in August its revenues calculated to Russian Accounting Standards fell 27.4% in the first six months of 2006 year-on-year, to 72 billion rubles ($2.7 bln). The company's gross profit fell 24.5% in the reporting period, to 22.1 bln rubles ($810 mln) and pre-tax profit declined 25.5%, to 18.6 bln rubles ($688 mln).
