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. Last Updated: 07/27/2016

Strabag Raises $1.9Bln in Vienna IPO

VedomostiWorkers preparing materials at a Strabag building site in Moscow. The Austrian firm plans more projects in Russia.
VIENNA -- Austrian builder Strabag priced its initial public offering near the top of the range Thursday, raising 1.33 billion euros ($1.9 billion) in Austria's biggest stock market debut ever.

While the deal was 10 times oversubscribed, Strabag allotted 28.2 million shares at 47 euros and deliberately shied away from the top end of the IPO's 42 euro to 48 euro price range in order to keep investors happy, it said in a statement.

"With 47 euros, we want to set a signal for a future stable and fair relationship with our new shareholders," chief executive and key shareholder Hans Peter Haselsteiner said. "We did not make use of the whole price range intentionally."

The Austrian builder plans to use the proceeds mainly for further growth in Eastern Europe and the former Soviet Union, where it plans bolt-on acquisitions and investment in building material projects, such as gravel pits and cement.

While Strabag's biggest market remains Germany, its business in Central and Eastern Europe -- including Russia -- is growing fast. Hopes for future deals include building projects in Sochi, which will host the 2014 Winter Olympics and is the target of a 9.4 billion euro investment program by the Kremlin.

Strabag's IPO overtakes Raiffeisen International's 2005 debut -- which raised 1.1 billion euros -- at the top spot of Austria's IPO rankings.

Strabag's market capitalization will be 5.4 billion euros based on the IPO price. The company itself will receive proceeds of 893 million euros, with the balance of the 1.33 billion euro issue going to existing shareholders who sold shares in the IPO.

The sale included a greenshoe option of 3 million shares that were allotted Thursday as well. Strabag had closed the books for retail investors last week due to the strong demand.