UBS, ABN Amro and KIT Finance are understood to have been appointed to handle the (IPO) of TGK-1

2006-11-05 - Independent on Sunday, The

Investment banks UBS, ABN Amro and Russia's KIT Finance are understood to have been appointed to handle the initial public offering (IPO) of Russian power generator TGK-1, which will raise around $2bn ([pound]1.1bn). The St Petersburg company, which operates some six gigawatts of power stations (about a 10th of the UK's total capacity), will list in London and Moscow in the third quarter of next year. TGK-1, part of the UES state-controlled electricity group, needs the money to build an extra 2GW of capacity. The appointment of the three investment banks followed a tender at the end of the month with 11 banks bidding for the mandate. UES wants to raise $80bn in total.

Barclays has agreed to settle a $144m ([pound]76m) lawsuit with Enron, the US energy giant that collapsed in 2001. Although Bar- clays has agreed to pay up, it is still chasing the $310m it claims to be owed by Enron. Barclays said it had agreed to the settlement in a bankruptcy court in New York because it was "preferable to the time, expense and unpredictability of litigation". The lawsuit was brought by the Enron estate and is separate from a class action by Enron shareholders, who are seeking to recover $40bn in losses. An investors' group had alleged that Barclays and other financial institutions helped Enron create ways to hide the real financial condition of the company. However, a judge rejected the claims. The shareholders have appealed.

Investors have begun the charge for shares in Russian steel giant Severstal, which last week revealed the pricing for its IPO ahead of its London Stock Exchange listing. Severstal is pricing shares between $11 to $13.50, but initial demand has already pushed the stock to the top of the scale, according to Tim Hughes, head of sales trading at IG Index. He said there was strong buying on the grey market, with IG quoting between $13 and $13.30 on Friday. Analysts said Severstal's price range would enable the group to raise between $1bn and $1.5bn of fresh capital. Severstal is expected to float on the London Stock Exchange in around three weeks.

Kohlberg Kravis Roberts was behind a[euro]40m ([pound]26.7m) offer for French music and telecommunications group Vivendi last month, but talks fell apart at the final stages of negotiations. Had it gone ahead, this would have been the world's biggest private equity buy-out. It is understood that the takeover stalled on a tax issue, with Vivendi apparently having to forgo a favourable tax environment created by the French government in 2004 if it sold its business to KKR.