Russian giant gears up for £5bn London listing

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AFK Sistema, one of Russia's largest conglomerates, has appointed Credit Suisse First Boston and Morgan Stanley to advise it on a possible listing on the London Stock Exchange next year, a move that would be the largest ever flotation in the UK by a Russian company.

The group said yesterday that it had this week received approval from the Russian securities regulator for a preliminary listing in Moscow, which is expected to be value the company at as much as $9bn (£5bn). Russian regulations force domestic companies to list in Moscow before undertaking an initial public offering abroad. However, the company is keen to list in London shortly after its flotation in Moscow, to increase the stock's liquidity and profile. In a statement, the company said it was considering listing in London through an offering of global depository receipts.

Sistema is the biggest non-natural resources company in Russia and has interests in most of the country's major industries, including real estate, retail, telecoms and financial services. Its assets exceed $6.8bn, and it reported sales of $3.76bn last year.

The group is limbering up to bid in the auction for Svyazinvest, the Russian national telecoms group, which is to be privatised. It is thought that Sistema plans to use the float to raise money to fund its bid.

Yesterday, Allianz, the German financial services group, which is a partner to Sistema's insurance company, Rosco, said it was merging its Russian asset management operations with those of Sistema.