Ukrainian companies and companies from the CIS will be among the most attractive IPO investment targets on the Alternative Investment Market of the London Stock Exchange (AIM) in the upcoming year, concluded the participants of the “Ukrainian IPO 2011: pending new billion” round table, held in Kyiv on July 14. The event was organised by Integrites international law firm and the London Stock Exchange in partnership with Rothschild investment bank.
In particular, the participants forecasted that Ukrainian companies would raise about $2.5bn in the first half of 2011 and prognosed the CIS companies’ share to comply 10% from the total capitalisation of AIM.
According to Andrei Liakhov, Partner of Integrites international law firm (Kyiv), about 10 companies have emerged in Ukraine whose owners are considering to make an IPO and are willing to transfer some control of their companies over to private investors in order to get cheaper credit resources, high quality restructuring and increased competitiveness. In his opinion, the main condition that justifies investors` expectations is the willingness of businesses planning to float, to do away with shadow work schemes, to increase the amounts spent on advisors and development, as well as to constantly make themselves known to the market.
Oleg Yolshin, CEO and Managing Partner of East Kommerts investment group (Moscow), believes that the potential of economies of the former Soviet countries and individual companies can enable the latter to claim at least $10bn of market capitalisation from AIM. According to Jon Edwards, Senior Manager of the London Stock Exchange Department for the CIS countries and Central and Eastern Europe, positive prospects for the successful offerings of Ukrainian enterprises derive from low cost offerings and more flexible requirements for an issuer to enter the Stock Exchange.
Igor Petrashko, Head of the Investment Banking Department of the investment company Troika Dialog Ukraine (Kyiv), believes that today the situation on the local markets and the status of a certain company are much more important to investors than the country’s political climate. He predicts that once the external economical environment is stabilised and Ukrainian companies are well prepared, they can raise $2.5bn by as early as the first half of 2011.
Oleg Bahmatyuk, Head of the Board of Directors of the AvangardCo IPL, is sure that investors are already beyond the situation where the lion’s share of road-show time needs to be spent on informing the foreign society of what Ukraine is. For the next stage, the development of the domestic stock market is what matters However, according to Sebastian Oechelhaeuser, Managing Director of Rothschild investment bank (London), so far one of the key factors when deciding whether to invest into Ukraine has been the situation on the Russian market.
According to Aleksandr Pochkun, Managing Partner of Baker Tilly Ukraine accounting firm (Kyiv), not all of the Ukrainian companies are ready to enter the Stock Exchange due to the inadequate preparation of their financial statements, a fact that may become a major issue for companies looking to float.