1 Dec 2009 11:16

Globaltrans plans $175-mln SPO

MOSCOW. Dec 1 (Interfax) - Globaltrans Investment, an SPV for private rail operator Globaltrans, is planning to offer $175 million worth of Global Depositary Receipts (GDR) in an SPO, the company said in a statement.

The SPO will comprise a primary element of approximately $100 million through the issue and sale of newly issued ordinary shares in the form of GDRs, with one GDR representing an interest in one ordinary share. Transportation Investments Holding Limited, (TIHL), the controlling shareholder of Globaltrans, also intends to raise approximately $75 million through the sale of Globaltrans GDRs. TIHL currently holds 50.1% of Globaltrans and intends to maintain the same level of shareholding post the offering. The final deal parameters will be announced following a road show commenced today and the determination of the offer price.

The net proceeds from the Offering received by Globaltrans will be used for the acquisition of new rolling stock and for general corporate purposes. Following the Offering, the Company expects its free float will increase.

Globaltrans also said it had entered into an agreement for the acquisition of an effective controlling 50% interest in LLC BaltTransServis (BTS) from TIHL in exchange for ordinary shares of the Company with a value of $250 million at the offer price. The acquisition is conditional upon the completion of the Offering.

BTS is one of the leading private Russian railway transportation service operators, specialising in shipping oil products and oil for Russian oil majors and other customers. As of June 30, 2009, its total fleet comprised 9,686 units of rolling stock including 9,042 rail tank cars, 595 gondola (open top) cars and 49 locomotives. In the six months ended 30 June 2009, BTS's Adjusted EBITDA amounted to $52.3 million, with net debt of $19.7 million as of 30 June 2009.

Globaltrans said it believes that the acquisition of BTS will be a significant step toward achieving its goal of balancing its business portfolio by combining gondola (open top) cars exposed to more cyclical growth with rail tank cars exposed to the relatively stable oil products and oil transportation market.

Deutsche Bank and Morgan Stanley Co. International plc are acting as Joint Global Coordinators and Joint Bookrunners for the Offering, and VTB Capital is acting as Joint Bookrunner. Deutsche Bank and Morgan Stanley Co. International plc have provided fairness opinions to the Board of Directors of Globaltrans with regard to the fairness of the consideration to be paid by the Company in connection with the acquisition of BTS from a financial point of view.

In connection with the Offering, the Company, TIHL and Envesta Investments Ltd., Globaltrans' 19.6% shareholder (EIL), will each agree, subject to customary exceptions, to a 180 day lock-up. TIHL will grant to the Joint Bookrunners an over-allotment option to purchase at the offer price additional GDRs of up to 10% of the total number of GDRs offered. EIL has advised Globaltrans that it, and/or entities controlled by its beneficial owners, intend to participate in the Offering and acquire New GDRs with a total value at the offer price of up to $5 million.

The GDRs to be issued in the Offering will be listed on the London Stock Exchange pursuant to the Company's existing block listing of GDRs. The Company's existing GDRs are already admitted to the Official List and to trading on the Regulated Market.

Shareholders Globaltrans at an EGM on November 23 voted on doubling its share capital from $11.969 million (116,959,064 issued shares, par value 10 cents each) to $23.392 million.

The company said that pre-emption rights with respect to the new shares would be disapplied for a period of 12 months.

Globaltrans said earlier that share capital was being doubled for acquisition purposes.

"The post-crisis market may offer us interesting opportunities for both organic and non-organic growth which we may want to finance by issuing new equity," Alexander Eliseev, Chairman of the Board of Directors, said at the beginning of November.

"Favourable prices of new railcars along with the recovering railway transportation industry have created a good investment environment for Globaltrans in which we will resume with our CAPEX programme," Eliseev said, explaining the decision to increase authorized share capital and disapply the pre-emptive rights of existing shareholders.

Globaltrans is the largest private freight rail operator group in Russia by the size of owned rolling stock fleet (based on publicly available information) and the first and only to have an international listing.

Globaltrans Investment PLC is incorporated in Cyprus and has operating subsidiaries in Russia, Ukraine and Estonia. The Group provides freight rail transportation, railcar leasing, and associated services to large industrial and medium sized corporate customers. It carries customers' cargoes to more than 25,000 destinations in Russia and Ukraine.

Globaltrans says its rolling stock fleet is one of the most modern in Russia with 26,347 railcars of average age of 4.5 years as of 30 June 2009. The Group employs 534 employees.

In 2008 the Group's freight rail turnover totaled 61.7 billion tonnes-km with 33.3 million tonnes of freight transported. In 2008 Globaltrans recorded revenue of $660.9 million with adjusted EBITDA amounting to $250.3 million.

Freight turnoover fell 4% year-on-year in the first half of 2009 to 31.2 billion tonne-km. net profit to International Financial Reporting Standards (IFRS) fell 86% to $11 million and revenue by 37% to $215.6 million.

Globaltrans' global depositary receipts are listed on the Main Market of the London Stock Exchange since May 2008.

Its shareholders include Globaltrans - Transportation Investments Holdings Ltd. (50.1%) and Envesta Investment Ltd. (19.55%). The free float is 30.35%.

Transportation Investments Holdings Ltd. Is controllled by top managers at N-Treans Konstantin Nikolayev, Nikita Mishin and Andrei Filatov (33% each). Envesta Investments is owned by Sergei Maltsev, general director of Globaltrans (51%) and by the board chairman, Alexander Eliseev (49%).

The IPO valued Globaltrans at $1.55 billion. The company, on the one hand, and its shareholders on the other $224.7 million each or a total of $470.4 million in shares.