© Reuters.
MOSCOW – In a rare occurrence for Russian share listings since Western sanctions intensified, UGC, Russia’s fourth-largest gold producer, has successfully priced its initial public offering (IPO) amid significant investor demand. The company set the price at 0.55 rubles per share, which puts the valuation of UGC at 117 billion rubles.
The IPO attracted strong interest from both retail and institutional investors, leading to an oversubscribed offering. Initially aiming to raise 5.5 billion rubles, UGC increased its target to 7 billion rubles due to the overwhelming response, with all the proceeds coming from the issuance of new shares. Notably, principal shareholder Konstantin Strukov did not sell any of his holdings in the process.
UGC’s CFO Artem Kletskin orchestrated the low-end pricing strategy that drew in over 70,000 investors, despite the backdrop of scarce Russian share listings following the February 2022 conflict with Ukraine and subsequent withdrawal of Western capital.
The gold miner, which operates key mining hubs in the Urals and Siberia regions, will see its free float reach approximately 6% post-IPO. Trading on the Moscow Exchange under the ticker UGLD is slated to commence today at 12:30 GMT.
Funds raised from the IPO are earmarked for reducing debt and supporting general corporate purposes. Additionally, there is a six-month lock-up period for owners and a one-month stabilization mechanism in place to support post-listing performance.
This move by UGC signals a defiance of international sanctions against owner Konstantin Strukov and represents a notable event in Russia’s financial markets as it continues to navigate economic challenges and isolation from many Western investors.
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