Evraz Said to Delay North American Unit’s IPO on Oil Price Drop

By Yuliya Fedorinova 

Evraz Plc (EVR), Russia’s largest steelmaker by production, delayed its North American pipe- and railmaker’s initial public offering as slumping oil prices threaten the unit’s valuation, according to three people with direct knowledge of the plans.
The IPO, planned for the middle of December, may be held next year if markets stabilize after the decline in oil prices, the people said, asking not to be identified because the information isn’t public.
The unit, Evraz North America Ltd., is seeking as much as $500 million from the sale of a 25 percent to 35 percent stake in the U.S., according to a prospectus filed with the Securities and Exchange Commission on Sept. 26. The shares would be listed on the Nasdaq Stock Market, according to an updated filing in November.
Evraz North America has annual capacity to make 5 million metric tons of steel products and operates plants in Colorado, Oregon, Delaware, Alberta and Saskatchewan. It makes pipes for producers of natural gas and oil.
Evraz’s press service declined to comment on the plans.
A Canadian affiliate sold $350 million of bonds on Oct. 31 at 7.5 percent, down from a targeted $500 million. The sale indicated that Evraz may not
get the IPO price that it’s seeking, the people said.
Brent crude, a pricing benchmark for more than half of the world’s oil, slumped 2.9 percent to $61.85 a barrel in London on Dec. 12, the lowest close since July 2009. It recovered to $63.12 at 9:22 a.m. in London.
U.S. oil drillers idled the most rigs in almost two years last week as WTI crude tumbled below $60 a barrel. Producers including ConocoPhillips have curbed spending, and the number of rigs is declining from a record, threatening to slow the shale-drilling boom that has propelled U.S. production to the highest level in three decades.
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