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. Last Updated: 07/27/2016

Rosinter IPO Priced At Low End

Rosinter Restaurants, which operates the Planet Sushi, Il Patio, TGI Friday's and Benihana chains in Russia, raised a smaller-than-expected $100 million in the first initial public offering by a restaurant company in a former Soviet country.

A total of 3.13 million shares were sold by the restaurateur and its owners for $32 apiece, the low end of the $31 to $43 price range, Rosinter said Friday in a statement. The company had planned to raise about $125 million by selling as many as 4.1 million shares. The sale values the Moscow-based company at $380 million.

Rosinter's shares will trade on the RTS index under the ticker ROST, and about 26 percent of the equity will trade freely after the IPO, the company said.

Some of the money raised will be used for acquisitions and to buy out minority investors in subsidiaries.

The country's top five dining chains control only 8.3 percent of the casual restaurants market, leaving room for consolidation, Rosinter said in the IPO prospectus, citing data by In-Depth, a research organization. Casual restaurants are defined as those with an average check of $20 to $70 per table.

"It's a sector where you can have serious competition, and if you are big, you are still not protected," said Jean-Louis Tauvy, who manages more than $300 million in Russian assets at Atria Advisors in Moscow. "You don't have an advantage being big." Tauvy declined to say whether he bought the shares.

Russia's dining-out market has increased an average 8.8 percent per year since 2002 to $10.1 billion in 2006, the company said in the prospectus, citing data provided by Euromonitor International. Euromonitor estimates the market will probably expand 7.3 percent per year through 2009 to reach $12.5 billion.

Rostislav Ordovsky-Tanayevsky Blanco, Rosinter's founder and chairman, will cut his stake to 60 percent from 86 percent after the IPO, according to the prospectus. Rosinter now runs 192 outlets, including 38 operated by franchises.

Profit last year climbed 30 percent to $779,000 on sales of $218.6 million, a profit margin of 0.4 percent.