The Russia Journal, April 9, 2002

By Christopher Kenneth

RosBusinessConsulting, a fast-growing, homegrown media and information-technology company, announced plans Monday to float shares on Russia markets in an initial public offering later this month. RBC said it will sell 16 million common shares, or about 16 percent of its charter capital, officials said. With a preliminary value of $0.75 to $0.85 a share, RBC said it expects to reap at least $13 million from the IPO.

"Our target is to become a multibillion-dollar company, both in revenues and in capitalization," RBC chairman German Kaplun told a news conference. According to the prospectus, the initial share price for RBC's float will be determined by April 15. "During this period [until April 15], Aton Capital Group will interact with market participants, tendering ordinary shares on a purely tentative basis with the objective of measuring demand for the shares at a given price," said Igor Bondarenko, a corporate finance manager with Aton brokerage. It, along with Alfa-Bank, is co-lead manager and book runner for the offering. In accordance with the Russian legislation, current shareholders - mainly the founders of the eight-year-old -will have the right of first priority to buy shares at the predetermined price on the first day of the IPO.

Unlike other Russian companies that have gone public, RBC will be the first to place its initial float on domestic markets. The timetable for the shares' final listing, which is scheduled to kick off simultaneously on both the Russian Trading System and the Moscow Interbank Currency Exchange platforms, has already been set out, Bondarenko said. "Preliminary applications are to be accepted until April 15," he said. "On April 16, the IPO share price will be determined, while on April 17, there will be distribution of the shares according to the preliminary applications received." RTS and MICEX executives have already promised to help make the RBC debut a huge success.

Analysts said RBC stock will offer investors unique exposure to Russia's rapidly growing media and IT markets. Formed as a distributor of financial data to Moscow's local and international business community in 1993, RBC has grown to become a diversified holding with some 500 employees, providing online financial news, advertising and IT services. Analysts' reports have presented RBC as a robust company in media and IT. According to KPMG, the company's independent auditor, gross revenues grew year-on-year from $8.83 million in 2000 to $16.9 in 2001 with $26.06 million projected for 2002.

Michael Hammond, a partner with the London-based City Capital Corp. Ltd, and an independent RBC board member, was upbeat on the prospect of the company's IPO . "We believe in this program, and therefore we are also investing in it on the same conditions as other investors so as to be in the same boat with them,"he said. "However, my being a board member does not mean I will close my eyes if RBC infringes on the accepted principles on corporate governance or transparency. Other independent board members and I will definitely come down heavily on RBC management if such a situation should arise, as we have our reputations to protect on the Russian equities market," Hammond said. Other analysts were taking a wait-and-see approach on the float. "The RBC offer is a small issue, but if it's successful, then maybe we can see more of it," said James Fenkner, an equity strategist with Troika Dialog.