Aeroflot could split GDR, mulling London or U.S. placement - source
MOSCOW. Dec 21 (Interfax) - Aeroflot plans to split Global Depositary Receipts (GDR) by a factor of 20 to five shares per GDR, a banking sector source told Interfax.
The airline has said its board was due to discuss ways to bolster GDR liquidity at a meeting on Wednesday, but it did not disclose details.
GDR for Aeroflot shares are traded in Frankfurt, with one GDR equivalent to 100 shares. The depository is Deutsche Bank and the limit on the GDR program is 20% of equity.
The current market price of the GDR is about $140 each and in the past 12 months it has gone as high as $270, which makes them illiquid. Portfolio investors in Aeroflot, who include the funds of Eaton Vance, Van Eck Global, UBS and Deutsche Bank mostly hold company shares rather than GDR.
The Interfax source said on December 21 that the company was thinking of placing GDR in London or New York and that the board would also discuss this issue.
Aeroflot's deputy general director for finance and investment, Shamil Kurmashov said earlier that the company does not rule out the possibility of splitting its GDR, but he did not specify at what ratio. He also did not rule out the possibility of the company issuing ADR or GDR on treasury shares. Subsidiary LLC Aeroflot Finance held 9.5% of the airline's shares at the end of the third quarter, and the company has also considered a buyback.
Kurmashov also said Aeroflot is considering a listing in Dublin and New York.
Aeroflot is controlled by the state, which holds a 51.1% stake in the airline.