The Pipe Metallurgical Company (TMK) is considering various options for the development of the US division: management does not exclude the possibility of selling a stake in the North American asset of TMK Ipsco or the IPO of this subsidiary. The main owner and chairman of the board of directors of TMK, Dmitry Pumpyansky, told Bloomberg about this (through TMK Steel Holdings, he owns 65.058% of the company). What package the company plans to sell for an IPO and what amount it expects to attract is not known. The representative of the company refused to say this, he only stressed that Pumpyansky "did not confirm the IPO, but only said that the company does not exclude it along with other opportunities for effective development of the American division."

But TMK already asked holders of Eurobonds for $ 500 million with repayment in 2020 to release from guarantees for this debt the North American asset of the group. This will give the company the necessary flexibility to maximize the value of the asset, the report said. Also, the gold mining company Polyus operated six months before the delisting of Polyus Gold (the main structure of Polyus) from the London Stock Exchange: it offered eurobond holders $ 750 million to replace the issuer from Polyus Gold to Polyus.

Pumpyansky's company relies on the pipe market for oil and gas production (segment OCTG). The US is the second home market after the Russian for TMK, the company representative added. "In 2017, for example, TMK expects a 100% increase in the performance of the US division in the annual comparison against the backdrop of explosive growth in shale drilling. TMK's share in the OCTG market is now 15%, and the company plans to gain a foothold in the top-2, "the representative explained. The Russian market brought the company for the first half of 2017 85.14% of EBITDA, or $ 235 million, and in the US the company earns $ 30 million, or 10.9%.

The US market has now recovered strongly, the company began to receive positive financial results in the US, says Nikolay Sosnovsky, director of metals and mining at Prosperity Capital Management. According to him, the cost of TMK Ipsco does not exceed $ 1 billion, which means that to significantly reduce the debt, the company will have to sell a large stake in TMK Ipsco. According to the company's report for the first half of 2017, TMK's net debt is $ 2.6 billion. ACRA analyst Maxim Khudalov believes that TMK will sell no more than 15% of the US asset, which can bring up to $ 500 million. "The company is on the rise due to an increase in drilling volumes in Russia and the United States, "the expert says. "At the same time, steel prices are at the local peak today, which means it's reasonable to fix the company's high ratings now," Khudalov explains. TMK has never abandoned the scenario to sell the asset on an IPO, Andrei Lobazov, an analyst at Aton, recalls, and now is a good time to think about selling a non-controlling stake. "The company did a great job and led the division in a good condition with stable EBITDA," the analyst explains. "In addition, oil is traded at two-year highs, while TMK's pipe capacity for the oil and gas sector is 100% loaded."

Ipsco Pumpyansky spoke about the possibility of IPO holding by Ipsco Pumpyansky back in 2014. Then, in a presentation for investors, the company indicated that it plans to raise up to $ 500 million from the placement of TMK Ipsco shares and the partial sale of TMK's own shares. It was expected that this operation would allow TMK by 2016 to reduce the debt to EBITDA ratio to 2.5. However, the company went in a different way and at the end of 2015 sold for 10 billion rubles. 13.44% stake in VTB, that year later sold these shares back to TMK Steel Holdings, exactly the same package Pumpyansky sold within the SPO for 10.42 billion rubles. In 2014, all TMK was worth $ 543.8 million, and now - $ 1.4 billion. As a result, the ratio of net debt to adjusted EBITDA at the end of last year was 4.79, follows from the company's presentation.

The North American Division of TMK consists of 10 factories in the US and two in Canada. Ipsco acquired the company in 2008, Bloomberg estimated the purchase of $ 1.18 billion. Publicly, the cost of acquiring the asset was not disclosed. It accounts for 15% of the revenue structure.