MOSCOW, April 19 (Reuters) - Russia's Kuzbass Fuel Company on Monday set the price guidance for its share placement, lowering earlier valuations for the company following weak demand for another Russian placement last week.
The steam coal producer, also known as KTK, set a range of $7.7-$10.4 per share for its first large-scale listing.
'The price range implies an offering size of between $295 million and $398 million and a pre-money equity value of between $650 million and $878 million,' the Siberian miner said in a statement.
That is lower than the valuation of $1.0-1.4 billion which sources had told Reuters was given by the banks organising the sale -- Troika Dialog and UBS.
Russian companies have rushed to the international and domestic capital markets, seeking to replenish their coffers after a recession and enabling their owners to lock in profits.
But there are signs some are being too ambitious -- last week seafood producer Russkoye Morye priced its IPO at the low end of the expected range and cut the placement size, adjusting to weaker-than-expected demand.
KTK, which already has a free float of about 11.1 percent, said this would increase to 48 percent after the placement.
'The company intends to use the proceeds from the offering primarily to procure and modernise coal mining equipment, as well as to construct new coal processing and enrichment facilities,' it said in a statement.
KTK made a net profit of 663 million roubles ($22 million) in 2009 with a net income margin of 6 percent.
(Writing by Toni Vorobyova; Editing by Michael Shields) ($1=29.89 Rouble) (antonina.vorobyova@reuters.com; Tel: +7495 7751242, Reuters Messaging: antonina.vorobyova.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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