The Russian government has approved the long-awaited initial public offering of an almost 35 percent stake in freight operator TransContainer, clearing the way for the state rail monopoly to raise upto $525 million. The shares will be sold "at a price no lower than the market (price), determined on the basis of an independent valuation," according to government documents.

Russian Railways may approve the IPO plans of its unit at a board meeting next week, opening the door for TransContainer to start a roadshow before the end of the month and to close the books by Nov. 15, sources close to the float plans have told Reuters.

The much-anticipated float of TransContainer has been planned since the beginning of the year as part of a multi-billion-pound fund-raising programme by the rail monopoly to update its ageing infrastructure.

Sources have said the company is valued at $1.2-1.5 billion, meaning the 35 percent minus two shares stake which Russian Railways is putting up for sale could fetch $420-525 million.

Russian Railways -- itself a target of the state's privatisation program -- currently owns 84.9 percent of TransContainer, while the European Bank for Reconstruction and Development (EBRD) has 9.2 percent and the rest belongs to Russia and foreign investment funds. (Reuters)