Russian IT firm Softline mulls Moscow IPO after split from global partner -sources

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FILE PHOTO: A view shows Moscow Exchange office in Moscow

By Alexander Marrow and Olga Popova

MOSCOW (Reuters) – Russian IT company Softline, newly spun off from its global partner, is now considering an initial public offering (IPO) on Moscow Exchange, two sources familiar with the plans told Reuters, the latest sign of life in Russian equity markets.

One of the sources, in investment banking circles, said Softline was aiming to list in the third quarter of 2023.

Softline did not respond to a request for comment. The sources declined to be identified because the plans have not been made public.

Russia’s IPO market has stalled since Moscow sent tens of thousands of troops into Ukraine in February, but some firms are beginning to make tentative plans.

Cybersecurity firm Positive Technologies held a secondary public offering late last month, defying a plunging stock market as Russia launched a partial mobilisation of additional servicemen.

London-listed Softline Holding plc began operating under a new brand, NOVENTIQ, on Thursday, after completing the sale of its Russian operations to founder Igor Borovikov.

Softline listed on the London Stock Exchange in October last year with a market value of around $1.5 billion, but its value has since plunged to about $209 million, after the LSE restricted some trading of Russia-linked entities in March.

Moscow-listed depositary receipts have continued to trade, apart from a suspension between Feb. 24 and March 30.

The Russian and global business now operate independently.

Softline said in a statement on Thursday that spinning off its Russian business was aimed at optimising its local growth strategy and potentially listing securities on the stock exchange.

“(This) will allow the group of companies to focus on the domestic market and friendly ones, and to develop its own solutions, as well as having the opportunity to establish fair value of the company’s securities on the Moscow stock exchange in the future,” the statement said.

It did not give further details or say if the securities might be shares, options or bonds.

In May, the company warned that uncertainty in Russia would see its growth rate there slow, but Softline Group CEO Vladimir Lavrov was optimistic this week about development in Russia, where turnover exceeds 1 billion roubles ($16.31 million).

“We see huge potential in Russia for development: a multitude of niches are being vacated and a large number of clients are interested in keeping IT infrastructure operability,” Lavrov said in a statement.

As Western sanctions and an exodus of foreign firms stymie Russia’s access to technology imports and solutions, Moscow has sought to boost the industry with tax breaks and preferential loans.

($1 = 61.3000 roubles)

(Reporting by Alexander Marrow and Olga Popova; Editing by Kirsten Donovan)

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