Element Group chooses SPB Exchange for IPO - media

MOSCOW. April 15 (Interfax) - Element Group, Russia's largest manufacturer of microelectronics, has selected the SPB Exchange for its initial public offering, RBC Investment reported, citing several market sources familiar with the progress of the IPO and a source close to the exchange.

The company considered "all possible options" for the exchange on which to carry out the offering and selected the SPB Exchange because it offered the optimal conditions, the sources said.

The group's parent company, JSC Element is subject to U.S. blocking sanctions, as are some of its subsidiaries, including leading Russian microchip maker Mikron. The SPB Exchange is also on the U.S. Specially Designated Nationals List (SDN List). The head of the exchange, Yevgeny Serdyukov said earlier that he saw potential for further development in offerings by companies that are subject to sanctions but nonetheless "creating Russia's manufacturing sovereignty," RBC Investment recalled.

A source familiar with Element Group's plans said that the proceeds from the IPO will probably "go toward expanding the capacity of existing enterprises and creating new production facilities in promising segments," RBC Investment reported.

Business daily Vedomosti, citing sources, reported in mid-March that Element has plans for an IPO in 2024. The paper said Element expects to be valued at 100 billion-150 billion rubles and plans to raise 10 billion-15 billion rubles to finance its ambitious investment program.

Element Group president Ilya Ivantsov said in an interview with Kommersant that the group will be technically ready to carry out an IPO in the first half of 2024.

Element was created in 2019 with the assets of investment group Sistema PJSFC and state corporation Rostec. The partners contributed 19 organizations involved in the development, manufacture and design of microelectronics to the joint venture. The group includes leading Russian chip maker Mikron (Zelenograd), the Electronic Engineering Research Institute, Progress Microelectronic Research Institute, Semiconductor Devices Factory, Novosibirsk Semiconductor Devices Factor with experimental design bureau and Voronezh Semiconductor Devices Factory (VZPP-Mikron).