ONE of Russia’s biggest steel groups, Novolipetsk Steel, is this week expected to announce a London listing that will value it at close to £6 billion.

The deal will catapult Vladimir Lisin, a little-known Russian metals tycoon, to international prominence. Lisin, who started his working life as a welder in a coalmine, owns 90% of Novolipetsk, with the listing valuing his holding in the group at about £5.4 billion — enough to put him in contention for the title of second-richest Russian behind Roman Abramovich.

Novolipetsk has hired merchant banks UBS and Merrill Lynch to handle the listing. Company executives and advisers have been pre-marketing the group to City institutions in the past week, and are expected to say this week that the listing will take place next month.

Earlier this year the Russian financial regulator gave Novolipetsk the authority to list up to 25% of its equity abroad.

Bankers had expected the group to list no more than 10% of its shares (in the form of global depositary receipts) in Britain — enough to raise nearly £600m — but sources close to the company last night said it could still decide to list a greater proportion. Novolipetsk declined to comment last night.

Most of the proceeds are likely to flow straight to Lisin. Bankers last night pointed out that the company was already cash-rich — it had $1.7 billion (£990m) on its balance sheet at the end of 2004 — and was able to fund its extensive technical-upgrade programme out of existing resources.

One City source said: “I think this is a case of some value being extracted and, probably more importantly, the creation of an acquisition currency in the form of easily tradable securities.” Moody’s, the credit- rating agency, recently gave Novolipetsk an investment-grade rating of BA2.

Novolipetsk’s move will confirm London as the preferred location for Russian firms looking to list abroad. In the past year Russian companies have raised more than £2.5 billion through the sale of global depositary receipts in Britain.

The largest fundraising was by the Sistema conglomerate, which took £1.3 billion. Evraz, a steel-industry rival to Novolipetsk, Pyaterochka, the retail group, and Novatek, the gas combine, have all listed in London in the past 12 months.

Lisin’s rags-to-riches tale has made him a symbol of the renaissance of Russian capitalism. After working as a welder he attended university, and rose through the ranks of the steel industry to emerge as deputy head of a large steel mill.

He then went to Moscow, eventually joining a trading group called Trans-World. When the Trans-World partners split up, Lisin took the Novolipetsk operation as his share.

Novolipetsk is Russia’s fourth-largest steelmaker but is regarded as its most consistently profitable. Last year it turned over $4.5 billion, and had earnings before interest, tax and depreciation of $2.6 billion. Just under 5% of its equity is listed in Moscow, although the market is illiquid and few shares change hands.

The company has been active in auctions of steel assets around the world, missing out on Erdemir, the Turkish steel group. Last month it was pipped again when Lakshmi Mittal, boss of Mittal Steel and Britain’s richest man, paid $4.8 billion for Kryvorizhstal, the Ukrainian steelmaker.

Lisin and Mittal have been buoyed by a strong world steel market over the past two years, driven mainly by China’s huge demand for steel products.

On Friday Corus, the Anglo- Dutch steel group, said it would raise prices in Britain by an average of £15 a tonne from next year.

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