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Company News

UPDATE 1-Pandemic winners and losers to end Russia's share sale drought

(Adds other upcoming Russian IPOs and SPOs)

MOSCOW, Oct 2 (Reuters) - Russian companies are poised to end a three-year drought for public share sales with a flurry of deals in Moscow and New York as both winners and losers from the COVID-19 pandemic look to raise funds.

Russian initial public offerings (IPO) and secondary public offerings (SPO) have been held back by political uncertainties in recent years.

But a pipeline of deals is now building as sellers look to raise cash to develop or deleverage and demand from local private investors picks up, two fund managers told Reuters on Friday.

Russia’s biggest airline, Aeroflot, plans to raise at least 80 billion roubles ($1 billion) in its Moscow SPO, it said on Friday.

The Russian government will take part in the deal to help a company hit hard by the pandemic, which grounded most passenger planes around the world earlier this year.

Institutional investors are expected to buy up to 39 billion roubles of Aeroflot’s new shares, with existing shareholders, including the Russian government, accounting for the rest. The books are expected to close on Oct. 8.

Russia’s biggest shipping company Sovcomflot, which specialises in transporting petroleum and liquefied natural gas, plans to raise 42 billion roubles from a sale of new shares in Moscow. The books are already covered, and the pricing is expected on Oct. 7.

With the pandemic boosting e-commerce, Russian online retailer Ozon and online cinema ivi are considering IPOs in the United States later this year. Russia’s e-commerce market grew by 23% in 2019, analysts at Aton said in a note.

Ozon may raise at least $500 million in its IPO, a banking source and a source close to the possible deal told Reuters on Friday.

Meanwhile, Russian real estate developer Samolet Group is considering a $50 million IPO in Moscow in October, a source close to the possible deal told Reuters, adding the company also planned an SPO to raise its free float to 40% in 18 months.

$1 = 78.4575 roubles Reporting by Olga Popova, Polina Devitt, Andrey Ostroukh and Anna Rzhevkina; writing by Polina Devitt; editing by Robert Birsel and Mark Potter

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