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Integra brochure
(pdf - 1.6 mb)

June 04, 2007

Service ‘Widget’

Service ‘Widget’From the very first moment of its creation, Integra’s strategy provided for eventual IPO. The company has been initially founded and positioned as a public one. That’s why there was no need for ‘special’ preparations for its positioning. From the first day of work, we were programming a certain format of business, reports processing and managerial decision-making. Much attention was paid to creation one of the key elements of a public company – a system of corporative management, as this is the system which is always difficult to change, if it initially fails. Long before the IPO, we invited independent directors and created an auditing committee. Actually, the company was a public one from the very beginning, the only thing which made it different was the fact that its shares were not sold in the open stock exchange. By mid 2006 about 40-45% of Integra shares belonged to investment funds. According to the initial plan, the company was to become the IPO four years after its creation. However, when the work began we saw that this might happen even earlier. Market situation was favored earlier placement. That is why the terms of placement were almost twice shorter. There was no long process of choosing the platform. Actually, LSE had no alternative. The major reason of it - were legal restrictions, which exist in certain stock exchanges. For instance, we could not do the IPO in Russia, as the investors were offered Integra Group Shares, the company that held all the assets and was registered in Cayman Islands. Foreign investors prefer work with Cyprus or other European holdings that work within the limits of European right and laws. However, as soon as Integra has such possibility, it will place the RDR (Russian deposit receipts). As to the NYSE, the Sarbeins-Oxly act made the legal procedure in the USA more complicated. As the result, the ‘Price’ of placing does not justifies the poles, which the company finally receives due to the capitalization growth and diversified investment portfolios. Our assessment shows that placing its shares in New York, Integra should bear additional expenditures in the amount of $5-10 millions. The underrators were chosen very carefully. We took into consideration the planned IPO volume and decided to imply simultaneously two banks, taking into account normal competition between them. We held the tender with the primary purpose to find a bank, which knows well the Russian Market. After the ‘Casting’ we chose ‘Renaissance Capital’, with which we had have already worked before. Besides, we could understand that Integra’s IPO would require an expert examination held by one of the leading world banks. We adopted the list of eight institutions and created our own evaluation score system. After a series of meetings on which the potential partners presented their vision of the IPO, each of them received a certain amount of scores by major criteria, which included: understanding our business, knowledge of special features of the Russian market, team qualification and experience. As the result, the Board of Directors elected Morgan Stanley Bank. Coming onto the stock exchange requires huge organization effort. Reports should be written before the deadline, the emission project should be elaborated and the auditors and lawyers should state their conclusions. That’s why we split the entire preparatory process onto several stages and appointed persons in charge for each stage. There were almost 50 stages. Delay of any of them even for a short time could break our final placement plans and this would mean that all our sleepless nights were in vain and the money was the complete waist. We had several reserve days for each stage (so-called ‘managing’ reserve), but it was soon used. The shares were placed at the top limit of the price range: $16.75 for GDR, and the order book was re-signed about 10 times. Some money accumulated during the IPO was spent for paying back the crediting portfolio ($240 of $557 million), and $190 million more were invested into the capital construction program for 2007. The rest of the money was used for buying assets. The funniest events take place before the book is closed. In case of a successful IPO you may become famous at once: everybody seeks a private talk with you or just a moment to remind about their existence. The phone does not stop ringing’.