Petrochemical major Sibur prepares to pay record-high dividend

Petrochemical major Sibur prepares to pay record-high dividend
Russia petrochemical major Sibur has spent $9bn on a new facility in Tobolsk, Siberia, that will double polymer production and the company is preparing for an IPO
By bne IntelliNews March 15, 2019

The board of directors  of Russian petrochemical major Sibur voted to pay a record-high dividend of RUB33.8bn ($0.5bn) for 2018, which would already include RUB11bn paid in 1H18 and leave RUB22.8bn to be distributed for 2H118, the company said on March 14.

Current Sibur's dividend policy sees a minimum dividend payment at 25% of annual adjusted IFRS profit. RUB33.8bn would thus be a minimum possible dividend payment on RUB135.2bn profit recorded for 2018.

The 2018 payout would exceed the 2017 dividends by over 38%. Throughout the end of 2018 Sibur was in focus as the company was expected to announce a highly anticipated IPO, to raise $2bn-3bn based on a valuation of $20bn-$26bn

With the construction of a new petrochemical processing facility in Tobolsk, in Siberia, the company’s current investment cycle is coming to an end and as growth plateaus the board believes that this is the right time to consider an IPO, Sibur CEO Dmitry Konov told bne IntelliNews in an exclusive interview, “Plastics in the snow: Sibur takes the lead in Russia's burgeoning petrochemical sector,” in December 2018.

If it happens then Sibur’s IPO would not only make Russia's biggest IPO in more than a decade, but it would also be a litmus test of the attractiveness of Russia's largest names in the face of the mounting sanction pressure.

Russia's largest petrochemical holding is controlled by Kremlin insiders Leonid Mikhelson (48.5%), Gennady Timchenko (17%), and Kirill Shamalov (3.9%). Chinese Sinopec and the Silk Road fund each acquired 10% in the company.

The Tobolsk project cost about $9bn and will potentially boost the company's output of polymers two-fold while increasing Ebitda by 50%.