* Healthcare provider to offer GDRs in London in October
* Deal size to grow as main owner plans to sell some shares
* To become the first Russian company in the sector to float
* Plans to expand its clinic network to meet growing demand
By Maria Kiselyova
MOSCOW, Sept 17 (Reuters) - Russia's MD Medical Group (MDMG) said on Monday it aims to raise at least $150 million to fund expansion of its clinic and hospital network in what would be the first London initial public offering by a Russian healthcare provider.
The announcement coincided with the launch by Russia's largest bank Sberbank of a $5 billion stake sale, which analysts say signals the reopening of the capital markets for Russian offerings. Only a handful of Russian firms have raised capital on the equity markets this year as stockmarkets were knocked by the euro zone crisis.
MDMG also joins mobile phone operator MegaFon and lender Promsvyazbank, Russian firms which this month took first steps towards London listings.
In addition to new global depositary receipts to be issued to raise at least $150 million, MDMG said GDRs for an unspecified amount of existing shares will be offered by its sole shareholder MD Medical Holding Limited, which is 100 percent owned by the group's chairman and founder Mark Kurtser, a senior Moscow doctor.
While the company did not say how much the sale of existing shares could raise, a source close to the deal said it will be a "significant additional" component.
The roadshow will begin in the first half of October, with pricing expected in the middle of next month, said another source close to the deal.
"Funds raised from the offering will help us to expand our network and to take advantage of the unfulfilled demand in Russia for high-quality medical services," Chief Executive Elena Mladova said in a statement.
Russia's healthcare system is still largely reliant on Soviet-era infrastructure and technologies, but privately-run clinics have grown in number significantly over the past decade.
Researchers Frost & Sullivan expect the Russian paid medical services market to grow to 959 billion roubles ($31.46 billion) by 2016 in revenue terms, from 482 billion roubles in 2011. Last year, private clinincs accounted for just 10 percent of the total commercial healthcare market, or 48 billion roubles.
MDMG was established in 2003 and runs nine medical centres. Its revenues grew 48.6 percent in the first half of 2012, year-on-year, to stand at 1.97 billion roubles, and earnings before interest, taxation, depreciation and amortisation (EBITDA) rose 58.8 percent to 851 million roubles.
Its bigger rival Medsi, which runs 18 clinics and is part of Russian oil-to-telecoms conglomerate Sistema, generated 2.93 billion roubles in first-half revenues, up 2 percent.
MDMG said in a statement it was targeting a free float, excluding the over-allotment option for bookrunners to purchase additional GDRs, of around 30 percent.
The new GDRS will be offered by MD Medical Group Investment Plc, the firm's Cyprus-incorporated parent company, with one GDR equating to one ordinary share.
JPMorgan and Deutsche Bank are acting as joint bookrunners of the offering, the company said.