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London – the right fit for Ukrainian
companies looking for growth capital
Jon Edwards and Zarina Korolova,
London Stock Exchange,
June 2008
London is the place for international companies looking for capital
TOP-15 International Main Market companies by TOP-15 International Main Market companies by
Market Capitalization (m$) Money Raised at IPO (m$)
1 850
33 480 948
2 467
37 465
2 990 772
14 216
1 483 9 434 1 781
704
1 530 3 820 7 446 173 565 213
3 970 4 053 5 042 7 138 620
734 450 955
1 866
3 626
EURASIAN NATURAL RESOURCES CORP URALKALI JSC EURASIAN NATURAL RESOURCES CORP URALKALI JSC
PIK GROUP OJSC NEW WORLD RESOURCES NV
PIK GROUP OJSC NEW WORLD RESOURCES NV
LSR GROUP OJSC FRESNILLO PLC
LSR GROUP OJSC FRESNILLO PLC
FERREXPO PLC HANSEN TRANSMISSIONS INTL NV
FERREXPO PLC HANSEN TRANSMISSIONS INTL NV
NOVOROSSIYSK COMMERCIAL SEA PORT EURASIA DRILLING CO LTD
NOVOROSSIYSK COMMERCIAL SEA PORT EURASIA DRILLING CO LTD
GUARANTY TRUST BANK VIMETCO NV
GUARANTY TRUST BANK VIMETCO NV
NEW BRITAIN PALM OIL LTD ALLIANCE BANK JSC
NEW BRITAIN PALM OIL LTD ALLIANCE BANK JSC
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London provides CIS companies with an established peer group
CIS companies on the LSE Over 100 CIS companies trading in
(number of cos within each sector) London
26
30 90% of International Order Book
trading in 2008 YTD is CIS
$22 billion raised by CIS companies in
London last year at IPO
13
2
1
7 2 3 1 Strong appetite for fast growth mid-cap
11 3 2
10
companies from the CIS in London - over
$ 1.7 billion raised to date by CIS
Automobiles & Parts Banks and Investment companies companies on AIM at IPO
Chemicals Construction & Materials
Energy Food & Beverage Average IOB daily trading volume is
Health Care Media 2.3 billion
Mining and Metals Oil & Gas
Real Estate Technology
Telecommunications Transportatoin
3
Interest across sectors in Ukraine from London investors
Sector: Metals Agro Real Estate
Money Raised at IPO: $213m $371m $68m
Mkt Cap at IPO: $1 671m $1 700m $388m
Mkt Cap Today: $4 959m $2 119m $826m
Free float: 25% 22% 27.5%
Top Holders in Stock: Vontobel N/A JPMorgan Asset Management
Credit Agricole Cheuvreux Blackrock Group
Capital Group COS Swedbank Robur Fonder
Nevis Corp Fidelity Management
Paneuro Products Franklin Templeton Investments
4
Main Market & AIM
Main Market
Supports the capital raising Supports the capital raising
activities of earlier stage activities of more established
companies companies
1,675 companies: Aisi Realty 1,550 companies: Ferrexpo, JKX Oil
Public, Dragon Ukrainian Properties & and Gas, MHP, Ukraine Opportunity Trust
Development, KDD Group, Landkom,
Nostra Terra Oil and Gas, Regal
Petroleum, Ukrproduct, XXI Century
5
London funds have a choice of products to invest in
6
CIS companies on AIM
• 49 CIS AIM Companies (including 25 Russian, 12
Kazakh, 8 Ukrainian, 1 Kirghiz)
• In 2007, CIS AIM companies raised £662m at IPO
• In 2007, CIS AIM companies raised £577m in
further issues
• AIM investors have backed CIS companies in a
number of sectors including oil & gas, mining,
telecommunications, media, food & drink,
property, construction and chemicals
7
AIM companies by market capitalisation
CIS Average Market Cap vs. AIM Average Market Cap (£,m)
AIM - All
AIM - CIS
60%
50%
40%
30%
20%
10%
0%
0 to 25 25 to 50 50 to 100 100 to 250 250 to 500 >500
AIM - All 53% 16% 14% 11% 4% 1%
AIM - CIS 20% 15% 15% 17% 22% 11%
The average for CIS AIM companies at admission is £98m.
Source: London Stock Exchange Statistics
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Ukrainian AIM Companies Case Study
Market Cap Growth since Admission to AIM
1200 Market cap at admission, $
1096
Market Cap today
1000
784
800
£, mn
600
418
400 320
300
208 200
200 106
69 60 44 62
0
XXI Century Regal Petroleum DUPD Landkom Aisi Realty Public Ukrproduct
Date of adm 16/12/05 27/09/02 01/06/07 22/11/07 01/08/07 11/02/06
Money Raised $68m $10m $104m $54m $17m $6m
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Fundraising on AIM
AIM Money Raised (£m)
Further
New
15,678 16,184
37%
60%
8,942
4,656
63%
2,095 40%
976
2002 2003 2004 2005 2006 2007
In 2007 the average IPO raise for AIM Companies was £36m and the
average further raise was £4m
Source: London Stock Exchange Statistics, June 2008
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Fundraising on AIM – case study
Hambledon Mining - Placings
£4m
£9m
20 p18
£10m p15
£5m
Price (pence)
15 £2.5m
p10
10 p8
p5
5
0
Jun-04
Jun-05
Jun-06
Jun-07
Oct-04
Oct-05
Oct-06
Oct-07
Aug-04
Dec-04
Feb-05
Apr-05
Aug-05
Dec-05
Feb-06
Apr-06
Aug-06
Dec-06
Feb-07
Apr-07
Aug-07
Hambledon Mining has grown its market cap from 10 million GBP
at Admission to 50 million GBP today
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AIM IPO Costs Overview
IPO Process
Legal reports and negotiations
Cost Structure (AIM)
Total costs to raise £50m, Law Firm Law Firm
Excluding value of options: ( NOMAD’s ) (Corporate)
£2,500K - £5,000K
Overall costs range: 5% - 10%
£150K - £300K,
£150K - £200K Of which NOMAD’s
Prospectus plus Lawyers get 25% - 40%
Preparation
1% of the firm Short - form
report
NOMAD Reporting
Company Accountants
Underwriting and
£100K - £150K
analytical coverage Technology
Experts
Broker 3 - 5% of
the deal, plus £10K £25K - £50K
1% of the firm
Listing and trading Services Public Relations and
Investor Relations
Stock Exchange:AIM
Independent
PR firms
LHC CREST Co Registrar Researchers
Source: Oxford Said Business School MBA Project, August 2006 as amended by London Stock Exchange
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AIM Trading
Company Sector Number of Shares 6 Mo. Average Number of Days
in Free Float Daily Trading to Trade Total
Volume Free Float
AIM
Landkom Agriculture 108 004 825 1 407 901 77
XXI Century Real Estate 12 322 200 41 095 300
Regal Petroleum Oil 58 791 359 2 110 974
28
WSE
Kernel Agriculture 26 121 580 146 597 178
Astarta Food Producer 5 000 000 20 176 248
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Contacts
Jon Edwards
Senior Manager, CIS & CEE
jedwards@londonstockexchange.com
+44 20 7797 1599
Zarina Korolova
Manager, CIS & CEE
zkorolova@londonstockexchange.com
+44 20 7797 4472
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