World’s largest natural soda ash group targets $7.5bn London listing

WE Soda, the company controlled by a Turkish media mogul that is the world’s largest producer of natural soda ash, plans to float in London in a boost to the stock market as it struggles to attract new listings.

The UK-based group, which has two large production sites in Turkey for the glassmaking ingredient, is targeting a $7.5bn valuation, which would be large enough to enter the FTSE 100, according to people familiar with the matter.

WE Soda, which announced its intention to list its shares on the premium segment of the stock exchange, is wholly owned by the Ciner Group, and generated $838mn in adjusted core earnings on $1.8bn in revenues last year. 

Chief executive Alasdair Warren said Turgay Ciner — a billionaire who owns a leading Turkish broadcaster — will continue to hold about two-thirds of the business. The company would have a free float of at least 10 per cent of issued share capital close to $1bn at IPO that would grow to a third of its shares, he added.

The announcement is good news for the London stock market, which has seen a dearth of new flotations this year. While GSK spun off and listed its consumer health company Haleon with a valuation of £30.5bn in London last year, the stock market has come under fire after chip designer Arm snubbed listing in the UK. The world’s largest building materials company CRH has also announced plans to move its listing to the larger capital pool of New York.

WE Soda expects to invest $5bn in order to more than double its current production capacity of 5mn tonnes of soda ash per year by 2030, primarily by expanding in the US.

It evaluated New York but opted for London because the City’s investors are receptive to industrial and extractive businesses and most of its business is currently focused on the European market.

“The reason we chose London is because we are a Europe-centric business, UK-based and our founder is a resident here . . . within industrials and extractives, it’s a good place to be listed,” Warren said in an interview with the Financial Times. “In London, we can be a big fish in a relatively modest-sized pond.”

Demand for soda ash — the 10th most consumed inorganic compound in the world — is expected to soar from 65mn to 81mn tonnes per year by 2030 as a result of increased demand for solar panels, lithium carbonate processing and buildings.

However, synthetic soda ash made by companies such as Solvay has fallen out of favour because of the high level of carbon emissions released by the production process, with the Belgian company deciding last year to partially spin off its soda ash business.

WE Soda produces the compound also known as sodium carbonate by drilling horizontal wells and passing water through to dissolve a mineral called Trona, creating a concentrated brine from which the soda ash can then be extracted.

London’s stock market has experienced an extremely slow start to the year, with IPO proceeds down 80 per cent year-on-year and only two listings on the main market in the first quarter, according to EY.

“There’s benefits [to companies] coming at a time when nobody else is as you get a lot of attention,” said Warren.