KIT Finance Rethinks IPO

LONDON -- Investment bank KIT Finance may drop plans for an initial public offering this year and instead opt to sell shares to private investors amid a slump in demand.

The company hired two international investment banks to explore options, including an IPO and share placement, deputy chief executive Sergei Grechishkin said. The names of the banks were not disclosed.

KIT Finance, which ranks itself as the country's largest bond trader, said Sept. 20 it could seek to raise as much as 25 billion rubles ($1 billion) in a 2008 IPO. It could now join another 85 companies worldwide in withdrawing or postponing IPOs this year, according to Bloomberg data, as equity markets slump and investor demand for offerings wanes.

"It will really depend on the market situation," Grechishkin said Thursday. "We clearly need access to capital."

KIT had said it might sell stock in Moscow and London late this year.

Net income was $106 million in the first half of 2007, and is estimated at $244 million for the full year, according to company documents. The expected full-year net income is little changed from 2006, though more than double the $101 million reported in 2005.

KIT Finance has 57 offices in Russia and eastern Europe and its services include investment banking, brokerage, and asset management.