Amtel-Vredestein IPO to Raise $308 million

Amtel is offering as many as 19.23 million Global Depositary Receipts, each backed by one ordinary share, at $13 to $16, the company reported. Russian companies have raised about $3.5 billion in share sales in 2005, more than in the 13 years since communism’s demise, the Interfax news agency has reported.

That stake, which includes as many as 11.54 million new shares, will equate to 29.5 per cent of Amtel, valuing it at as much as $1 billion. The company originally said it would sell 25 per cent of its stock. Now Amtel is offering 19,230,770 common shares, including 7,692,308 existing shares. The remainder of the offering will consist of new shares.

Amtel, whose shareholders include Templeton Asset Management and Singapore’s state investment company Temasek Holdings, is taking advantage of demand for shares in Russian businesses.

Amtel was founded in 1990 as an equipment provider for the defence industry and maker of natural rubber for Russian tyre complexes. It began acquiring tyre plants in 1997. In 1999, a year after Russia defaulted on $40 billion in domestic debt, causing asset prices to collapse, Amtel bought a stake in the Kirov tyre plant and acquired the Voronezh tyre plant and the Kemerovo and Chernigovsk chemical fibre plants. Amtel, Sibur and Nizhnekamsk Tire, controlled by Tatneft, have 65 per cent of Russian sales and 90 per cent of the nation’s output.