Russian Railways on track for float in London

Russia's giant, state-owned railway company is eyeing a London float in a part-privatisation that would value it at more than 1.7trn roubles (£33bn).

Russian Railways, whose assets include 85,200km of track, 1 million employees and 1 billion passengers, is planning to sell as much as a quarter of the business in 2015 or 2016 through a share listing.

Vladimir Yakunin, Russian Railways' president, told The Independent that London was his preferred location, after Trans Container, Russian Railways' "daughter" container-handling operation, was floated there in 2010.

"We have been working in London for many years and we are known here in this market. My private position is that there is a supportive case for placing the shares of the mother company here in London as well," Mr Yakunin said in an interview in London, where he had come to pick up tips on Olympic transport ahead of Russia hosting the winter games in 2014.

"My preference is for the place where we see the most serious investors.

"In three years, of course, the situation could change. But I feel quite comfortable in London and dealing with its banks and investors.

"Or it could be decided to have some proportion of the shares placed in London and some proportion in Russia," said Mr Yakunin, who has a big say in where the flotation will happen, although the final decision rests with the Russian government.

Mr Yakunin is one of Russia's most powerful men and has known President Vladimir Putin for many years. He estimates that Russian Railways was worth about 1.3trn roubles when he became its head in 2005 and is now worth more than 1.7trn roubles.

A London float would see Russian Railways follow Evraz, the steel maker part-owned by Chelsea football club owner Roman Abramovich, and the Polymetal gold and silver producer into the FTSE 100.

But Russian companies have had mixed fortunes in London.

Polyus Gold eventually listed in June, but only after months of uncertainty which saw it shelving its flotation plans in March, while the Russian real estate company 01 Properties pulled its IPO in London in May.

Russian Railways is attempting to transform itself from a symbol of soviet-era style management to a modern, transport-industry leader and plans to spend 13trn roubles by 2030, upgrading the network, adding 30,000km of track, building new stations and beefing up security.

Mr Yakunin also said he is keen to work with British companies in overhauling his railway system.

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