Qatar Investment Authority Mulls Buying In to En+’s Upcoming IPO

Qatar Investment Authority Mulls Buying In to En+’s Upcoming IPO

Russian Federation energy concern En+ Group may have found another major buyer for its planned IPO in London and Moscow next month, as the Qatari government’s sovereign wealth fund is said to be in discussions with the firm.

London’s Financial Times reported yesterday that sources revealed to them that the Qatar Investment Authority is taking concrete steps to join CEFC China Energy and Glencore plc as participants in En+’s flotation in November. The QIA, which holds a major stake in Glencore, is considering the move as a larger effort at making inroads into Russian business ventures, according to the unnamed sources cited by FT.

“QIA are keen to come in through the flotation but [En+ owner Oleg Deripaska] knows it is about price,” said the unnamed source.

En+ is attempting to raise US$1.5 billion in the IPO, with US$500 million already confirmed to come from CEFC. Glencore, which is owned by Deripaska’s close personal friend Ivan Glasenberg, has already promised to swap its stake in Rusal for stocks of En+ upon completion of the IPO.

QIA’s buy-in is good news for En+’s IPO, as Deripaska is gunning for a valuation of between US$8 billion and US$10 billion, though some experts believe such a number to be somewhat optimistic.

Founded by the Qatari government in 2005 to manage oil and gas surpluses, the QIA is tasked with enhancing the country’s economic diversity. With an estimated US$335 billion in assets under management, the fund is a member of the International Forum of Sovereign Wealth Funds. At present, QIA owns British department store Harrods, Paris St Germain football team, and has a stake in German auto manufacturer Volkswagen. The Authority is also a majority stakeholder in Canary Wharf Group Investment Holdings, which is London’s largest property owner, and has significant real-estate interests in New York City and Washington, D.C. as well.