On July 14 a round table “Ukrainian IPO 2011: pending new billion”, organized by the International Law Firm “Integrites” together with the London Stock Exchange, was held in Kiev hotel “Opera”.

Generally, the round table elaborated on the prospects of Ukrainian companies in the IPO in 2011. Among most important issues:
  • IPO opportunities for Ukrainian companies after the world economic crisis
  • Difficulties, problems and mistakes that make Ukrainian companies in entering the external markets, and ways to resolve them
  • State policy regarding issuers seeking for floatation in the near future

The round table was attended by John Edwards – a senior manager of London Stock Exchange in the CIS and CEE, Sebastian Oehelhauzer – Managing Director of “Bank Rothschild”, Andrey Lyakhov – Partner of the International Law Firm “Integrites”, Oleg Elshin – CEO and managing partner of the investment group “East Kommerts”, and Igor Petrashko, director of investment banking at “Troika Dialog Ukraine”. Representatives from the companies that are going to conduct an IPO in the near future, or already have, came to share their experiences, in particular, general director of the group of companies “Ukrproduct Group” Sergey Evlanchik, as well as representatives of the “AvangardCo IPL” holding, who already have experience of post-crisis IPO. “Baker Tilly Ukraine” was presented by its managing partner Alexander Pochkun, who came up with the speech on “Transparency of financial reporting in the preparation for the IPO”

According to roundtable participants, currently at least 6 Ukrainian companies are planning to hold an IPO in October-November. Another 4-5 are working hard to intensify the preparation and study the potential demand for their shares and the possibility of different platforms. Experts consider AIM (Alternative Investment Market) of the London Stock Exchange (LSE) the most acceptable for these companies.

According to John Edwards, Senior Manager of LSE in CIS and CEE countries, due to low cost of stock floatation and loyal demands towards the issuer are the reasons for the positive prospects for the successful placement of Ukrainian enterprises. “The companies from the CIS have chance to draw on AIM roughly twice as much money than companies from other because they initially have a high potential for further growth”, – he said.

According to Andrey Lyakhov, observed until recently low activity of Ukrainian companies in entering the alternative markets (for the last 5 years, only 8 companies raised about $ 700 million) due to a lack of awareness about its features and how the company will work after placement.

Sergey Evlanchik, the General Director of the “Ukrproduct Group”, which has placed its shares on AIM in 2005, noted in this connection: “With the IPO company will automatically claim a higher credit rating, receives extensive business contacts and actually become a proven point of entry into Ukraine for investors which had not previously worked in the country.”

In the course of conversation about the problems faced by Ukrainian companies planning to enter foreign markets, managing partner of the auditing company “Baker Tilly Ukraine” Alexander Pochkun said: “One of the major problems hindering the active output of domestic firms in the IPO, is their unwillingness to disclose information in accordance with the international standards, and also the lack of skilled professionals in the preparation of financial statements.”

Roundtable participants consider that, with proper legislative support of the stock market by the state, and stabilization of the political situation in Ukraine, in 2011 the number of Ukrainian IPOs in the stock markets may exceed pre-crisis figures.