Koks plans $1.5-bln capex program for 2010-2019
MOSCOW. Jan 13 (Interfax) - Coke producer OJSC Koks plans a capital-expenditures program costing $15 billion for the period 2010-2019, says a presentation by analysts at UBS - an organizer of the company's planned IPO.
Koks produced 1.6 million tonnes of coking coal in 2010, and is looking to quadruple output by 2017 with the launch of three new mines. The cost of producing a tonne of coking coal now is $29.
Iron-ore concentrate production came to 2.15 last year, and Koks plans to be producing as much as 3.3 million tonnes by 2025. Cost of production here is $28 per tonne.
Koks turned out 2.7 million tonnes of metallurgical coke last year, though it has capacity to produce 2.9 million tonnes. The company plans to increase that capacity to 3.6 million tonnes by 2020 by putting a new battery of coke ovens into commission. Pig-iron output came to 2 million tonnes (capacity 2.2 million). The company plans to increase pig-iron production capacity by next year once the reconstruction of oven #1 is complete.
Koks saw net losses of $16 million in 2009, versus net profits of $261 million the previous year. Sales revenues were $850 million and EBITDA $145 million.
UBS estimates the company's net debts at $578 million as of end-2010.
The analysts at UBS point out that that the disastrous flooding in Australia will have a large impact on company financials in that the price for coking coal - and consequently for coke - will be going up. They project prices will rise $50 per tonne on the world market and $30 at home. More than 75% of the company's coke sales are on the domestic market.
Koks plans to have initial public offering (IPO) on the London Stock Exchange and on Russian exchanges, the company said in a recent statement.
The offering will include treasury stock and shares from the existing shareholders: Boris, Yevgeny and Andrei Zubitsky. Citi, UBS and VTB Capital have been appointed the global coordinators and bookrunners for the IPO. The IPO will be completed before the middle of February, a source on the financial market told Interfax. Premarketing will begin on January 12, January 12, and the road show is scheduled to begin in the last week of January.
The company plans to place shares and Global Depositary Receipts (GDR). Each GDR is backed by two ordinary shares. Russian investors will be offered ordinary shares and foreign investors - ordinary shares and GDR. Koks will use the proceeds for its investment program and for other purposes.
Koks shares are currently quoted on the RTS "B" list and are cleared to trade on MICEX. Actual trading on the RTS and MICEX is expected to begin on or near the date that the IPO is completed in London.
Board member Yevgeny Zubitsky commented, "The proposed IPO constitutes the next logical step in the group's development and will enable us to increase the amount of production supplied by our own raw materials, strengthen the vertically integrated production chain and continue to raise the operational effectiveness for further growth."
A source at an investment fund told Interfax previously that the IPO would be held in January. Koks plans to raise $500 million in the IPO, which is expected to value the company at up to $2.5 billion, the Financial Times reported.
A source in banking circles told Interfax the IPO would fetch $400 million-$500 million. One of the IPO organizers, UBS, has valued Koks at $2 billion-$2.5 billion, a financial market source said. The Federal Financial Markets Service (FFMS) cleared Koks to place 82,511,600 shares abroad (25% of existing ordinary shares) at the end of December. Koks shareholders had approved an underwriting agreement with Citigroup, UBS and VTB Capital in September.
The offering of ordinary shares and GDR will be provided by Boris Zubitsky and his two sons, Yevgeny and Andrei, who owned 85.83% of shares (26.67%, 32.05% and 27.11% respectively) as of October 1, 2010.
Sources told Interfax in mid-May 2010 that Koks planned to restart the IPO process that had been interrupted by the global financial crisis. The interested parties had a "principle understanding" that the IPO might raise $300 million-$400 million.
Koks includes OJSC Tulachermet, OJSC Combine KMAruda, OJSC Krontif- Center, CJSC Koks, Coke Area LLC, Vladimirskaya Mine, Romanovskaya-1 Mine, CCM Berezovskaya and Butovskaya Mine (Chesnokovsky sector of Kemerovo coal deposit) and the S.D. Tikhov Mine (Nikitinsky coal deposit, Grade Zh coal), as well as Polema, Ufaleynickel and Rezhnickel.