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. Last Updated: 07/27/2016

Sitronics Sets $500M Target for 2007 Float

Sitronics plans to become Russia's first technology firm to float its shares and aims to raise over half a billion dollars in an initial public offering scheduled for the first quarter of 2007, the company said Tuesday.

"We hope the deal will amount to $500 million to $550 million," said Alexander Boreiko, head of Sitronics investor relations department.

Sitronics, a technology arm of services conglomerate Sistema, said in a regulatory statement that the IPO would consist of newly issued and existing ordinary shares as well as global depositary receipts.

"We expect that the bulk of funds will go to the company," Boreiko said.

Sitronics, a provider of telecommunications, IT and microelectronic services, intends to list the global depositary receipts on the London Stock Exchange and the ordinary shares on the RTS and the Moscow Stock Exchange.

Troika Dialog analyst Andrei Bogdanov said it was difficult to assess the prospects for the IPO since there was no information on how big a stake it wanted to sell. Last year, the company said it wanted to raise up to $1 billion by selling 20 percent of shares.

"I think they are now tacitly admitting they are now more realistic about how much they are worth now," Bogdanov said.

A company source said Sistema would maintain control over the firm while Sitronics was likely to spend the funds on new projects, acquisitions and debt financing.

Last March, Sitronics issued $200 million worth of Eurobonds with a tenure of three years. Sistema and affiliated companies control 76.88 percent of Sitronics, while the European Bank for Reconstruction and Development holds 3.67 percent it bought in September for $80 million.