UGC IPO priced at 0.55 rubles/share, increased to 7 bln rubles

MOSCOW. Nov 22 (Interfax) - The placement price in the initial public offering of Uzhuralzoloto Group of Companies (UGC) has been set at 0.55 rubles per share, the Russian gold miner said.

This corresponds to the lower end of the announced price range and values the whole company at 117 billion rubles.

Based on the preliminary parameters of the IPO, the company could have raised 5.5 billion rubles, but it has decided to increase the offering to 7 billion rubles taking into account a stabilization stake.

UGC's free float will be about 6% of its increased charter capital after the IPO.

The IPO drew strong interest from retail and institutional investors, and demand exceeded the offering severalfold across the whole announced price range, UGC said.

The offering consisted only of newly issued shares. Principal shareholder Konstantin Strukov did not sell shares.

The proceeds from the IPO will go to the company, which will use them for general corporate purposes and to reduce its debt burden.

The deal provides for a standard lock-up period of six months for the company and its owner and a stabilization mechanism in the amount of up to 15% of the offering for 30 days.

UGC's shares will begin trading at 4:00 p.m. Moscow time on Wednesday.

UGC, one of Russia's top 10 gold producers, has two mining hubs, in the Urals (Chelyabinsk Region) and Siberia (Krasnoyarsk Territory and Khakassia).