Russia's Megafon slides on London exchange debut

Shares in Russia's number two mobile operator Megafon slid in London on Wednesday following an initial public offering that raised $1.7 billion. Limited trading of the company's global depository receipts (GDR) began on Wednesday on the London Stock Exchange, and by 1315 GMT they had fallen by 2.1 percent to $19.58. Megafon had announced earlier that it had fixed the price of the shares in the initial public offering at $20, at the lower end of the $20-$25 range it had set in mid-November. The operation valued MegaFon at $11.1 billion, the company said in a statement. Russia's largest mobile operator, MTS, is listed in Moscow and has a market capitalisation of around $16 billion. The operation raised $1.7 billion for two shareholders who sold shares: Swedish telecom operator TeliaSonera and a MegaFon subsidiary MICL registered in Cyprus. "MegaFon expects to use approximately 50 percent of the net proceeds from the offering received through its subsidiary MICL to repay or refinance existing debt and the remainder will be used for general corporate purposes including the continuing development and expansion of its network," the company said in a statement. Full trading of the company's GDRs begins on December 3. The company's shares will be quoted on Moscow's MICEX stock exchange.