Bloomberg News

Russian Zhivoy Office Starts IPO as Stock Index Reaches Year Low

June 13, 2013

OAO Zhivoy Office, a Russian office supply company, is seeking to raise 500 million rubles ($15.6 million) in an initial public offering in Moscow to develop the business at a time the Russian stock index is at a year low.

The share sale, which began today, will close on June 21, Zhivoy Office said in a regulatory filling. The price range is from 115 rubles to 135 rubles per share, said Pavel Bilenko, the head of IPO organizer Eastland Capital CEO, in a phone interview today.

“It’s a unique event when small a low-profile non-production company starts to sell shares on the open market,” Andrey Vashevnik, who manages $25 million as chief investment officer at R&B Investment Fund Ltd., said by phone in Moscow. “Zhivoy Office’s stock may be interesting to Russian funds that focus on local stocks.”

The St. Petersburg-based office supplier, which is offering as many as 4 million new shares, wants to use the proceeds to expand into other Russian regions and launch new products, including soaps, vodka and condoms under the Office Crazy People brand, Vedomosti reported on May 31, citing Lada Butenko, the company’s marketing director.

Russia’s office supply market grew 10 percent to 72.2 billion rubles in 2012 from a year earlier, according to a company presentation to investors. Zhivoy Office holds 1.1 percent of the Russian market and plans to expand it to 5.9 percent by 2017, it said in the presentation.

The Micex index, calculated based on prices of the 50 most liquid Russian stocks, slid 1.9 percent today to 1,276.55, the year’s lowest level.

“Now is not the right time to sell shares on the market as the economic environment may not allow” the company “to get the maximum proceeds,” Vladimir Tsuprov, the managing director for BNP Paribas Investment Partners, said by phone from St. Petersburg.

To contact the reporter on this story: Anatoly Temkin in St. Petersburg at atemkin@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net


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