Arifmetika Financial Solutions, a Russian firm that gives modest loans to individuals, expects to begin trading in Canada in early 2022 and hopes to raise $100 million in the next 12 to 18 months, according to the CEO of its parent company, OR Group.
The technical listing, which would allow the microfinance company to float on the stock exchange without having to make an initial public offering, would prolong a wave of Russian company listings, assuming geopolitics, particularly tensions over Ukraine, do not derail the plan.
OR Group’s founder and director, Anton Titov, told reporters, “We want to raise roughly $100 million.” “Each round will be worth 12-15 percent, with three rounds scheduled. We intend to sell 49 percent of our stock in a year and a half.
OR Group said in September that it wanted to list Arifmetika on Canada’s TSX Venture Exchange through a SPAC-equivalent capital pool company, Navigator Acquisition Corp., which began as a footwear chain and developed to become a wider e-commerce platform
Arifmetika and Navigator are expected to sign a final agreement soon, though Titov did not specify when, and the company could be valued at $100 million to $140 million after a first round of funding in the first half of next year, according to Titov, who expects the company to be valued at $100 million to $140 million after a first round of funding in the first half of next year.
“There is variety here,” he added, comparing the technical offering to an Initial Public Offering (IPO), which involves onerous regulatory procedures. “You can attract money gradually, diluting a significant ownership, or make modest additional issues.”
As Russia recovered from the first effects of the COVID-19 pandemic, IPO activity picked up, and worldwide stock markets soared, fueled in part by individual investment.
Nexters, a video game developer, used Kismet, a Russian special purpose acquisition company (SPAC), to begin trading shares on the Nasdaq in August.
SPACs are shell corporations that gather capital to buy a private company and bring it public without the need for an initial public offering (IPO).
The intended listing for Arifmetika will be similar.
Titov estimates that the company’s revenue will be 2.2 billion roubles ($29.75 million) in 2021, with a net profit of roughly 600 million roubles.
Arifmetika needed the extra funds, according to Titov, to help it gain a competitive advantage in a market that some of Russia’s top banks have begun to join, as well as for acquisitions.
“We are ready for effective discussions right after the deal,” Titov said, adding that the company may expand worldwide in 2023 after making considerable progress in the Russian market.
