Agricultural group Rusagro plans to raise between $250 million and $300 million by listing shares in Moscow in May, two banking sources close to the potential deal said Friday.
Rusagro Group, which produces every eighth spoonful of sugar consumed in Russia, was valued at roughly $1 billion by the underwriting banks, one of the two sources said, on condition of anonymity.
"The listing will be entirely Russian," the source said.
Kommersant reported earlier that Rusagro planned to list shares on the London Stock Exchange, although this was denied by the two sources to whom Reuters spoke.
Rusagro, which also grows wheat and barley, joins a lengthening line of Russian companies seeking to float this year to take advantage of benign market conditions after the turmoil of 2008-09.
Rusagro, controlled by Senator Vladimir Moshkovich, plans to use the proceeds from the initial public offering for its development and for possible acquisitions, the first source added. The company was not immediately available for comment.
Other companies are focusing on domestic bourses. Seafood producer Russkoye Morye plans to raise $200 million in a Moscow share placement that could begin in March, a banking source close to the deal said Friday.
Rusagro controls seven sugar plants in Russia and owns land in the fertile regions of Belgorod, Tambov and Voronezh, as well as a vegetable oil business. Its chief executive, Maxim Basov, previously worked for mining and steel giant Metalloinvest.
About 60 percent of Rusagro's earnings before interest, taxation, depreciation and amortization are derived from its sugar division. Rusagro has earlier said it anticipated that sales in 2009 would reach 25 billion rubles ($838.9 million).
The market valuation for the company depends to a large extent on the global price for sugar. International raw sugar prices reached a 29-year high on Feb. 1, but have since fallen by about 30 percent.
Rusagro has picked Renaissance Capital, Alfa Bank and Credit Suisse as its IPO bookrunners, Kommersant reported. All of the banks declined to comment.