Oligarchs resurrect plans for $9bn Suek listing on LSE

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The Independent Online

Russian billionaires Andrey Melnichenko and Sergey Popov have resurrected plans for a $9bn listing of Suek, the world's fifth-biggest coal exporter, on the London Stock Exchange.

The move, planned for the first half of 2010, will kick off a series of mining listings in London, which will also include Ncondezi, a Mozambique venture.

A number of big-name banks pitched this month for roles on the listing, which was previously mooted in mid-2008 until the chaos in the markets forced the abandonment of the plan.

The scale of the deal, which could see around 25 per cent of the company listed in both London and Moscow, has attracted interest from some of the biggest names in Western investment banking.

UBS, Credit Suisse, Morgan Stanley, Deutsche, Goldman Sachs, Citi, and Bank of America Merrill Lynch are all chasing one of the four roles expected on the deal. Renaissance Capital, which worked on the previous proposal, and VTB are the Russian banks that have pitched.

An industry source said that most banks had told the board of Suek, which is also known as Siberian Coal Energy Company, that a 25 per cent listing would value the whole company at around $8bn to $9bn. The money would be used to fund project developments.

A second round of interviews could take place this week, with formal appointments expected to be confirmed shortly after. The oligarchs own the business, which employs 46,000 people, through their investment vehicle Donalink.

Ncondezi, which has four coal-exploration licences, is mulling a listing for the middle of next year. "We are thinking about an appropriate market on which to list, which could be AIM [London's junior stock exchange]," said Graham Mascall, who was recently appointed as its chief executive.

Mr Mascall joined from Lubel Coal, a Ukraine-focused group that is being advised by JP Morgan Cazenove on a potential AIM listing. Lubel had planned a £100m flotation for late this year, but this is now unlikely to happen until the second half of 2008.

United Company Rusal, the Russian aluminium giant, will start marketing its $20bn-to-$30bn Hong Kong flotation on 11 January.