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. Last Updated: 07/27/2016

Strabag Starts $1.9Bln IPO to Fund Growth

VIENNA -- Austrian builder Strabag on Monday kicked off its initial public offering of shares worth up to 1.35 billion euros ($1.9 billion) to underpin its growth in Eastern Europe and the former Soviet Union.

Strabag said it was offering up to 28.2 million shares for 42 to 48 euros each in the IPO, Europe's fifth-biggest this year, at a slightly lower price than previously indicated by the banks managing the sale, which was seen as too expensive by fund managers.

Strabag, which called off a planned stock market debut in April and sold the shares earmarked for the canceled IPO to billionaire Oleg Deripaska instead, hopes to tap the rapid expansion of construction in emerging Europe.

While its biggest market is still Germany, with 38 percent of last year's output, Central and Eastern Europe including Russia, with 29 percent, is growing most quickly, chief executive Hans Peter Haselsteiner said.

"I've been in this business for 30 years now and I have never seen a market like this," Haselsteiner said. "In Russia, the question is not which order we can get, the question is which order we can accept given our limited resources."

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 Russian government.

Haselsteiner said Strabag would use the proceeds of the IPO for bolt-on acquisitions in Central and Eastern Europe, acquisitions of Western European road builders and investment in building material projects such as gravel pits and cement.

Strabag shares are expected to start trading on Oct. 19.