Russian outsize freight specialist Volga-Dnepr Group believes its much-awaited share offering could be 18-24 months away as it studies the mixed fortunes of other companies that have tested the Moscow market.

The company was encouraged by the successful initial public offering (IPO) of manufacturer Irkut earlier this year, but is concerned at the much weaker performance of other offerings, notably the 33.6 Drugstore chain a year earlier. There have still been only a handful of IPOs in Russia. Vice-president Sergey Shklianik says: "An important factor in the Irkut IPO was the timing. They entered the market at the peak of the Russian market in general. "

He adds: "There was very positive sentiment after the Putin election. But the drugstore network made much less."

The company is in "intensive consultations" with its advisers and expects to have a clear picture of how to set about raising funds by late this year.

"It looks as if we are approaching the natural limit for borrowing," says Shklianik.

Another factor driving the IPO timing is the company's desire to see its recently launched scheduled freight subsidiary AirBridge Cargo (ABC) established in the market.

The Boeing 747-200F operator is about to receive its second aircraft and in 2005 is expected to contribute about half of group revenues.

"We believe that only by demonstrating the success of ABC will we be able to have a fair price for our shares," says Shklianik.

Current shareholder Kaskol Group and the airline's management are committed to each retaining blocking stakes of at least 25% plus one share.



Source: Flight International