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. Last Updated: 07/27/2016

Pinchuk Plans IPO For $1Bln

ReutersPinchuk listening as former U.S. President Bill Clinton speaks at a European Strategy conference in Yalta on June 29.
Ukrainian billionaire Viktor Pinchuk said he planned to raise at least $1 billion by selling shares of pipe maker Interpipe in Ukraine's biggest initial public offering.

"We need investments and we want to enter Western markets," Pinchuk said in an interview Thursday. "Next spring, we will have an IPO in London." He will sell no more than a 25 percent stake in "the first stage."

Pinchuk, the son-in-law of former President Leonid Kuchma, aims to invest in more non-Ukrainian companies as a former adversary, Yulia Tymoshenko, emerges as favorite to become prime minister for a second time. During her first term as prime minister, she canceled his purchase of the country's biggest steelmaker and threatened to annul more state asset sales of the Kuchma era.

Pinchuk bought Kryvorizhstal for $800 million under Kuchma's rule. President Viktor Yushchenko and Tymoshenko, who came to power in the 2004 Orange Revolution, took the plant back under state control and resold it to ArcelorMittal, the world's largest steelmaker, in October 2005 for $4.8 billion.

"The acquisition of Kryvorizhstal was totally legal," said Pinchuk, adding that the government's resale was politically motivated. He said he appealed to the European Court of Human Rights in Strasbourg and was waiting for a ruling. No date is set, he said.

Tymoshenko, front-runner for the post of prime minister after last month's elections, is threatening to regain control of other Pinchuk companies, including Nikopolskiy Ferrosplavnyi Zavod, the country's biggest producer of ferromanganese, which was also sold at a discount by Kuchma. Pinchuk said that auction was also legal.

Pinchuk aims to diversify and reduce the number of Ukrainian companies in his portfolio. "We have different kinds of risks," mainly political, Pinchuk said. "We do not have a predictable government and nobody knows what will happen." He opened an investment company, EastOne, in London on Sept. 27.

Interpipe, whose customers include Gazprom and Rosneft, had sales of more than $1.6 billion last year, producing 4.3 percent of the world's seamless pipes and 13 percent of its railway wheels.

Merrill Lynch, ABN Amro and Deutsche Bank will manage the share sale, Pinchuk said. Interpipe has a total value of as much as $6 billion, he said.

Pinchuk will use some of the proceeds to build a $600 million electric-arc-furnace shop in Dnipropetrovsk. The plant will be finished in two years. He also will spend $600 million setting up a private equity fund in Ukraine.

Interpipe may merge with another big pipe producer such as TMK, Russia's largest, Pinchuk said.

Pinchuk has a doctorate in pipe design and made his fortune by arranging supplies for pipe makers after Ukraine broke from the Soviet Union 1991. In 2002, he married Kuchma's daughter Olena Franchuk.

Pinchuk has a net worth of $2.8 billion, according to Forbes magazine. He said, "The chief executive officer of my company estimates my fortune at $10 billion."