More Ukrainian Companies Go IPO

A growing number of Ukrainian companies are lining up to raise capital via initial public offerings on foreign stock exchanges.  And there are plenty of foreign investors eager to snap up shares.

Since February 2005, when dairy holding Ukrproduct held the first Ukrainian IPO on the Alternative Investment Market of the London Stock Exchange, at least five Ukrainian companies have followed suit on international stock exchanges, rising from $4.5 million to $20 million each.  The most recent company to issue an IPO was Chamber Member and Kyiv-based real estate developer and property manager 21 Century, which rose over $120 million in late December, selling 32 percent of its shares to foreign institutional investors with a complementary listing on the London Stock Exchange's Alternative Investment Market.

Analysts predict that even more Ukrainian companies will list shares on foreign exchanges soon.

Most companies see IPO's as an inexpensive way to raise money in a country with an undeveloped baking sector, and thus with few attractive loan opportunities.  While eager to receive new funds, however, Ukrainian companies are careful not to cede managerial control, listing only 10% to 30% of their shares.

Most investors are interested in IPO's in the fastest-growing sectors such as food processing, retail and banking.  Investors are more wary of IPO's planned by companies with opaque management structures.

January-February, 2006

Commerce

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