Russian Restaurant Chain to Raise $125 million from IPO
Rosinter Restaurants Holding, a leading restaurant operator in Russia and other former Soviet republics, intends to raise about $125 million from an initial public offering.
Following on from Rosinter’s announcement that it was going to float on the Russian stock exchange, the company has given more information, saying that it intends to raise about $125 million from the IPO.
Rosinter has said that it will sell about 40% of the company’s stock to Russian investors and international institutional investors outside the United States.
The company said that it would use the money to expand and develop its business and to strengthen its core brands and franchising system. Rosinter declined to set out the time frame for the IPO at the present time. Real estate in the USA especially in California is a major concern for expansion. As an update to this story the US has taken a huge decline in real estate prices since June of 2007. Down 20% in California, and slightly more in inland cities, e.g. new homes Dublin, CA have dropped 21+% in the last year.
Rosinter Restaurants Holding operates restaurants in Russia, Ukraine, Belorussia, Kazakhstan, Czech Republic, and Hungary.
Analysts for Renaissance Capital, which is the sole organizer of an IPO for Rosinter Restaurants Holding, have estimated the company’s capitalization at $427 million-$486 million, the bank said in an analytical report.
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RUSSIAN IPO INVESTOR ALERT
French holders of Russian government bonds remind investors that the Russian Federation is still in default today (May 2007) on their estimate of some US$ 90 billion owed to them since the Bolshevik, then the Soviet, and now the Russian Federation governments have all unilaterally repudiated Tsarist debt and refused any form of contact or dialogue with their legitimate bona fide creditors.
They also remind investors that in its Sep. 15th 2006 report entitled “Governance matters: a decade of measuring the quality of governance”, the WORLD BANK has rated Russia’s governance comparable to that of Swaziland, Zambia and Kazakhstan. Russia came 151st out of 208 countries in terms of (…) accountability, quality of regulatory bodies, and rule of law, (…). In particular, rule of law (i.e. the courts and the quality of contract enforcement) was judged as effective in Russia as it is in Ecuador, Indonesia, and Bangladesh. Nicaragua, East Timor, and China’s ability to control corruption was judged similar to Russia’s.
On February 26th 2007 the St. Petersburg Times, quoting a report from Vedomosti, wrote that “Surgutneftegaz managers covertly hold 72 % of the secretive oil firm” and that Deutsche UFG analysts had had to “raise its estimate number of outstanding shares from less than 26 billion to (…) 43 billion” which “implies a 40% dilution in the value of the stock”.
In Paris on April 3rd 2007 to launch the merged NYSE-EURONEXT entity Mr. John Thain, the New York Stock Exchange CEO, warned that he was “very concerned about the quality of corporate governance, the transparency of company financials and the protection of minority shareholders. A number of Russian companies raise serious questions around these issues.”
Despite these findings, and the main rating agencies’ knowledge that Russia is in default on US$ 90 billion of Tsarist debt, Russia is rated “INVESTMENT GRADE” whereas it should clearly be in “SELECTIVE DEFAULT”.
French bondholders intend to pursue their claim until full settlement at present value, by any legal means and in any jurisdiction they deem appropriate.
EVERY POTENTIAL INVESTOR IN RUSSIA MUST BE MADE AWARE OF THESE RISKS.
FRENCH CREDITORS OF THE RUSSIAN FEDERATION STRONGLY ADVISE AGAINST ANY FORM OF INVESTMENT IN A COUNTRY WHOSE SOLVENT GOVERNMENT HAS IN THEIR VIEW SYTEMATICALLY REFUSED TO FULFIL ITS NATIONAL AND INTERNATIONAL CONTRACTUAL OBLIGATIONS, REFUSES ALL CONTACT AND DIALOGUE WITH ITS LEGITIMATE BONA FIDE CREDITORS, AND REFUSES TO DISCLOSE LIABILITIES WORTH US$ 90 BILLION.
May 2007