Not a good day for Russian steel giant Severstal as its made its initial public offering of shares in London. The sale raised around 850 million euros, less than expected as analysts said Severstal has fixed the price too high. Chairman Alexei Mordashov had hoped to sell a quarter of the company’s shares but low demand means he still has almost 81%.
Severstal is the biggest of Russia’s producers turning out 27% of the country’s steel. Earlier this year it failed in a bid to merge with Arcelor as part of Arcelor’s attempt to fight off Mittal Steel. Arcelor’s shareholders voted against that deal, partly because of concerns about the Russian company’s corporate governance record.
Severstal shares in Moscow finished the day down 7.3%. They start trading in London next Tuesday.