Uses IPO to up stake in newly floated mobile operator
Russian mobile giant MegaFon’s CEO has emphasised his faith in the company by buying nearly £100 million in shares using his own money.
MegaFon, Russia’s second largest mobile phone company by customers and owned by the country’s richest man Alisher Usmanov, was floated on the London Stock Exchange only last month [November 2012] but the IPO failed to raise as much as hoped, with a $20 per global depository receipt – pricing the shares at the bottom end of the $20-$25 rung.
It was the largest new capital raising by a telecommunications company in London since Orange in 2001.
But now it’s been revealed that MegaFon’s CEO Ivan Tavrin has used the relatively low pricing to up his stake, acquiring 7.75 million shares at a price of $20 each, amounting to 1.25 per cent of the business. His purchase was made as part of a long-term incentive plan approved by the company’s board in November, according to which Tavrin was given the option to purchase up to 5 per cent of the company’s share capital.
News of his hefty purchase emerged on Christmas Eve after the stock exchange closed at midday and when the closing price of Megafon shares stood at $23.7.
The disclosure, meanwhile, has caused ripples in the City even though MegaFon – which includes among its directors former Treasury minister Lord Myners – had floated only floated 15 per cent of its stock in London.
Commented IG Index sales trader Will Hedden: “It’s an interesting purchase. It’s going to raise questions, again, about how much we really know about these big Russian names listing here.”
Tavrin, a former advertising agency boss, is a long-term business partner of Usmanov and prior to joining the mobile operator was president of TV company UTH Russia that they co-owned.