Russia
Ken Lopian, senior vice president at Bank of New York, says no fewer than ten Russian level I ADRs are in the depositary's pipeline for 1996, with Hungarian and Czech companies also testing the waters.
Last year saw Russian utility Mosenegro raise $22.5 mn through a privately placed ADR structured by BoNY. Lukoil, an oil firm, followed with the first level I ADR out of Russia.
Metals group Norilsk Nickel, which will likely be the first in line for an ADR, was planning a trip to New York at the end of February. The announcement, along with a rise in profits in 1995, bumped the company's shares up a notch. Norilsk said its provisional profit for 1995 was 2.5 trillion roubles, up from 1.5 trillion roubles in 1994.
Other likely candidates for ADRs, according to BoNY, are the Seversky Trubny Zavod pipemaker, Inkombank, the Chernogorneft oil company, Moscow's GUM department store and the Unified Energy Systems utility.
While the initial batch of Russian ADRs are level I, capital raising issues may be on the way. New York-based law firm Milbank, Tweed, Hadley & McCloy, which has advised several Russian companies on ADR issues, says the ultimate goal for everyone is to raise money, and level III issues could be slated for later this year.
Signs from US marketeers augur well for Russia. Prime Minister Viktor Chernomyrdin visited the NYSE on the arm of US Vice President Al Gore recently, and was amazed by the excitement in the hall of 4,000 people trading shares in 2,700 companies with a total value of $6 trillion - 15 times the size of the entire Russian economy.
'I believe soon you will have to trade Russian equity here,' Chernomyrdin told Richard Grasso, chairman of the Big Board. 'We look forward to it,' replied Grasso.