China’s CIC makes invests in Moscow Exchange IPO

RDIF claims it was responsible for bringing in international co-investors, including CIC, the European Bank of Reconstruction and Development, Cartesian Capital and BlackRock. RDIF now owns approximately 4.5% of Moscow Exchange, up from 3%, having invested $80 million in the IPO. CIC, which was participating through a subsidiary, Chengdong Investment Corp, put in a similar amount.

The full commitment from foreign direct investors is said to be $200 million, which means RDIF and its partners covered more than half of the offering.

Moscow Exchange priced its offering at RUB55 per share, valuing the bourse at RUB126.9 billion ($4.2 billion) with a free float of 30%. The offering comprised shares held by existing shareholder Micex (Cyprus) and Micex-Finance. State-owned investment bank VTB Capital has the option to buy 13% of the issued shares within 30 days of the IPO to ensure the price stabilizes.

"Having successfully placed RUB15 billion, Moscow Exchange is strongly positioned to develop as a major global trading venue across multiple asset classes," said Sergei Shvetsov, chairman of the exchange's supervisory board, in a statement. "We believe that the Russian economy will continue to be one of the fastest growing major global economies and the exchange will play a critical part in this growth."

Established in June 2011, RDIF is expected to receive $10 billion in Russian government funds over the next five years. In every investment, the sovereign fund is required to secure co-investments that at least match its own commitments. This is intended to facilitate investment into the Russian economy.

Last year, Russia and China confirmed plans for a joint $4 billion investment fund, backed by initial contributions of $1 billion apiece from RDIF and CIC. The remaining $2 billion is expected to be generated from other Chinese institutional investors. Up to 70% of the capital will be invested in projects across Russia and other CIC countries, while the remaining 30% will back Chinese businesses with Russian involvement.

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• Topics
• Greater China
• Expansion
• Financials
• IPO
• Russia
• China
• CIC
• RDIF
• Financial Services