$2bn Russian listings on back burner

Two Russian firms yesterday postponed London listings worth more than $2 billion (£1.2bn), as high valuations and a looming $3.6bn share sale by Russian bank VTB left private issuer hopes in tatters.

Severstal's gold unit Nord Gold, due to close the books on its up-to-$1.5bn offering yesterday, has decided to delay its plans.

The news came only hours after steel pipe maker ChelPipe, which had been looking to raise up to to $688 million, pulled its listing. Coking coal and pig iron producer KOKS withdrew its planned offering last week.

A fourth Russian company, pumps manufacturer HMS Hydraulic, went ahead with its float on Tuesday, but the proceeds were vastly reduced from expectations and its shares closed lower on its first day of trading.

Sources close to Nord Gold had repeatedly insisted the firm was not willing to follow suit and cut the price of its shares, offered at 300p to 390p each, to get the listing away.

"It has been a very difficult market to navigate," said a financial markets source. "It just seems to be unique to Russians and their disconnect to the institutional (investor] market… all four deals struggling to find a sensible reaction."

Bankers and analysts have said high valuations, market jitters following unrest in Egypt, and VTB's efforts to sell a 10 per cent stake in a secondary public offering have all reduced the appetite for private Russian issuers.