Kommersant, March 29, 2002

Yesterday RBC Information Systems, which comprises the well-known RosBusinessConsulting information agency, made an announcement about the first initial public offering (IPO) in Russia. Underwriters believe that RBC is worth over $100m, but analysts from other companies think that this valuation is two or three times is more than this.

RBC shares will be floated on two domestic exchanges, MICEX and the RTS, simultaneously. The book-building process will commence on April 8. Its results will be made public in two weeks on April 17. The shares will be listed with MICEX and the RTS a week after, i.e. around April 22.

The company is planning to place 16 million shares (16 percent of the registered capital). The Aton investment company, which is RBC's underwriter, estimates the company's capitalization at $100m to $120m. Therefore, it aims at raising $16m to $19m from the IPO. The RBC management reserved the right to sell not more than 8 percent of its shares not earlier than 6 month after the IPO. "The agency intends to invest the IPO proceeds in the development of the network of regional and international representatives, the acquisition of a number of IT companies and the establishment of a business TV," said RBC President Yury Rovensky.

It is RBC's second step aimed at attracting finds for business development. In the middle of December 2001, the company went on a roadshow in Switzerland. As a result, it managed to place pre-IPO convertible bonds valued and $5m. They will be converted into part of the shares issued at the IPO. The company keeps the names of bondholders confidential. Yury Rovensky said in an interview with Kommersant that representatives of a number of investment funds had entered the RBC board after the bond placement. Particularly, they are Hans-Joerg Rudloff (Barclays Capital) and Michael Hammond (Executive Director of ABN-AMRO Rotshild).

RBC managers believe that the shares of the Russian IT company will find buyers even amid a slump in the shares of foreign companies. However, some analysts question the valuation given by the underwriter. RBC's revenue was $17m in 2001. The company's earnings are expected to grow by 66 percent in 2002. According to Brunswick UBC Warburg Co-director Denis Rodionov, it is comparable with the growth rates of such wireless service providers as MTS and Vimpelcom. "The coefficient of price to revenue before tax and amortization equals seven. RBC has the same coefficient. However, I would decrease it to three or four, because RBC's assets cannot be compared with those of MTS and Vimpelcom. Based on that, the company's capitalization is $40m to $50m," Rodionov added.