Oleg Deripaska brings another holding company to the stock exchange

In May, En + can initiate a public offering of a 20% stake for about $2 billion.
Last week, managers of the En + power-generating holding company Oleg Deripaska met with investors. At the meeting, it was announced that the company plans to sell 20% of shares on the stock exchange for about $ 2 billion. Four people familiar with the participants of the meeting told this to Vedomosti. The IPO may pass in May, if the conjuncture is favorable, say two interlocutors. To place papers En + plans on the London stock exchange, they continue. The listing in Moscow is not excluded, adds one of them. The possibility of placement in Hong Kong is not being considered, two of them emphasize, although earlier Vedomosti sources did not rule out such an option. Representatives of En + and the organizers of the forthcoming deal - VTB Capital and Sberbank declined to comment.

Investors will be offered new shares and shares of Deripaska's structures in equal proportion, Vedomosti's interlocutors say. The received money En + is going to spend on repayment of a part of $ 5,5-billion debt. The total debt of the holding (it consolidates UC Rusal's debt as a controlling shareholder) - about $ 13.9 billion.

En + brings together Deripaska's assets in metallurgy, energy and mining. Among them, 48.13% of UC Rusal, the energy holding company Eurosibenergo (owns 95.7% of Krasnoyarsk HPP, 90.5% of Irkutskenergo, etc.), the Krasnoyarsk Metallurgical Plant and the ferromolybdenum producer Soyuzmetallresurs.

The main assets of En + - UC Rusal and Eurosibenergo are located in Eastern Siberia and are linked. The stations of Eurosibenergo, Russia's largest private energy holding company, completely cover the needs of UC Rusal's power plants, which in 2016 account for 26% of the cost of aluminum production.

In the medium term, electricity supplies will grow, Vedomosti's interlocutors transmit the contents of the En + presentation. UC Rusal can launch the Taishet aluminum plant. The company has been building it for a long time - in 2005-2015. The project UC Rusal spent 23 billion rubles., Wrote "Interfax". The general director of UC Rusal Vladislav Soloviev estimated the completion of the plant at $ 700 million including VAT.

VTB remains

In the presentation for investors it was stated that all 100% of En + are controlled by Deripaska, Vedomosti interlocutors told. Meanwhile, a few years ago, a 4.35% stake in En + was taken by VTB Capital. Investbank received them on account of debt. Then En + was estimated at $ 11.5 billion. "VTB Capital" did not sell the package, his representative said.

Previously, UC Rusal delayed the launch of the project due to the unfavorable situation on the market. Now aluminum is becoming more expensive: from the beginning of 2016 - almost a third to $ 1950 / t, with half of the increase in this year. The reason is the reduction in the area of Beijing aluminum production, the source of electricity for which are coal stations, one of the main sources of environmental pollution. Aluminum UC Rusal is produced mostly due to the clean energy of the hydroelectric power station, which gives it an additional advantage, En + top managers emphasize at the meetings, Vedomosti interlocutors say.

En + promises regular dividends, which will be calculated from free cash flow or EBITDA. Among the assets of En + so far only Irkutskenergo brings stable dividends - about 5 billion rubles. For 2014-2015 years. (Payments for 2016 are not yet determined). UC Rusal in 2015 resumed the payment of dividends after a long-term interruption: for the first nine months of 2015 and 2016, The aluminum holding paid out $ 250 million each.

En +, of course, has its advantages: a small investment program, a quasi-protection against currency risk through a stake in UC Rusal (55% of its output in 2016 was exported), a synergistic effect from the power-aluminum complex operating in the same cluster, says Analyst of the "Renaissance Capital" Vladimir Sklyar. Another important factor is the lack of a "state agenda" in the strategy: no one can force the development of the Far Eastern energy sector without obvious guarantees of the return of these investments. So, for example, "RusHydro" during the reform of the electric power industry was transferred to "RAO ES of the East", for the sake of refinancing debts of which the company had to conduct an additional issue.

Nevertheless, $ 10 billion for En + - it's too expensive, the portfolio manager of a large investment fund is skeptical. This evaluation needs a discount, the investment bank manager agrees. Among the risks, En + is a holding structure, he says: directly the company's management can not influence the dividends of UC Rusal, which, moreover, largely depend on the payment of Norilsk Nickel. Among the minuses is the high debt burden of Eurosibenergo and UC Rusal, obsolete capacities that will inevitably require investment growth, Sklyar lists. In addition, he recalls, investors may be wary of unobvious corporate decisions - Eurosibenergo has not announced an offer to minority shareholders of Krasnoyarsk HPP and Irkutskenergo.