* Russia First Freight Co could conduct IPO in Q3 2011
* IPO will test the market for a strategic investor
By Gleb Stolyarov
MOSCOW, Nov 18 (Reuters) - Russia could sell 10 or 15 percent of the country's second-largest rail freight operator, First Freight Co, through an initial public offering in the third quarter 2011, Russia's transport minister said on Thursday.
The owner of the operator, state-run transport monopoly Russian Railways, has been considering two options -- selling 50 percent of First Freight Co in an initial public offering, or selling 25 percent through an IPO and another 25 percent to a strategic investor
"We think the sale of First Freight Co has been dragged out for too long ... The controlling stake needs to be sold, and there is an offer to sell it through an IPO," Transport Minister Igor Levitin told journalists.
Russia's Economy Ministry suggested listing 10-15 percent of First Freight Co to test the market's interest in the company, which operates 21 percent of all Russian freight cars, Levitin said.
First Freight Co Director General Salman Babayev has valued the company at $5 billion, and Vladimir Lisin, the owner of Novolipetsk Steel and Russia's richest man according to Forbes magazine, wanted to buy a strategic stake in the company, sources told Reuters in May. (Reporting by Gleb Stolyarov; Writing by Katya Golubkova; Editing by Jessica Bachman and Jon Loades-Carter)