Russian Railways may list units

An executive with the world’s biggest rail operator said the company is seeking to separately list two of its units in the hopes of raising up to $3.5bn. However, Russian Railways said there are no plans to sell shares in the company itself.

Russian Railways, the world’s largest railway operator, fully-owned by the Russia government, said today that it is considering separate initial public offerings for two of its subsidiaries.
 
The announcement was made by Dmitri Novikov, an adviser to the president of Russian Railways, at a financial forum in Hong Kong. Novikov said the IPO could target subsidiaries TransContainer, Russia’s largest freight container operator, and Freight One, the country’s largest transport operator, and raise $1 billion and $2.5 billion respectively, according to preliminary figures.
 
Novikov said the planned listings had already been approved by the company’s supervisory board in December and could take place either in London or Hong Kong later this year or in early 2011. Following his comments, Russian Railways issued a statement saying it is only planning to IPO some of its subsidiaries, which it declined to name, but has no plans to actually sell shares in the company itself.
 
Whether or not the two listings will launch will probably depend on the success of the IPO of Russian company Rusal, the world’s largest aluminium producer, to be launched imminently. Rusal is aiming to raise about $2.6 billion and is set to become the first Russian company to list in Hong Kong.
 
Russian Railways employs over one million people and has €82 billion in assets.