Sunrise aims to raise $1.3 bln in Swiss market debut

* IPO planned for first half of 2015

* Telecoms firm expects gross proceeds of about 1.35 bln Sfr

* Would be largest Swiss flotation since 2006

* Sunrise (Taiwan OTC: 2720.TWO - news) says listing shares to strengthen balance sheet (Adds detail, comment from CEO and CFO)

By Joshua Franklin

ZURICH, Jan 14 (Reuters) - Swiss mobile telecoms company Sunrise plans to raise around 1.35 billion Swiss francs ($1.3 billion) in a stock market debut, potentially Switzerland's biggest flotation since 2006.

Switzerland's No.2 telecoms operator behind Swisscom said on Wednesday the move -- the latest planned capital raising in a lively start to 2015 for European equity markets -- would help to cut its debt.

A person familiar with the matter said it could also make it easier in the longer term for the firm to merge with Orange (Taiwan OTC: 4554.TWO - news) Switzerland to create a stronger competitor to Swisscom (Other OTC: SCMWY - news) , though the source added there were no current plans for this.

Orange Switzerland was recently bought by telecoms tycoon Xavier Niel's NJJ Capital. {ID:nL6N0U226J]

Sunrise said it expected the initial public offering (IPO) to take place in the first six months of 2015, but declined to be more specific or indicate how much shares would cost.

The source said the listing would be in three to four weeks if everything ran smoothly, adding the shares were likely to be priced at a modest discount to Swisscom.

Swisscom's enterprise value (equity plus debt) is around eight times its earnings before interest, tax, depreciation and amortisation (EBITDA). Using the same multiple, Sunrise would be valued at more than 5 billion francs, the source said.

If it goes ahead as planned, the IPO would be Switzerland's biggest since Petroplus' flotation in November 2006, according to data from the SIX Swiss exchange.

Sunrise was bought by private equity firm CVC (Taiwan OTC: 4744.TWO - news) in 2010 for 3.3 billion francs, and over the last three years has invested more than 1 billion francs in its network.

CVC will make shares available in a so-called greenshoe, which, if exercised in full, would increase the IPO size by a standard 15 percent.

Sunrise said it was unclear whether CVC would retain a majority stake after the IPO.

Sunrise plans a dividend of 135 million francs for 2015 which will be paid in 2016. From 2016, it hopes to achieve a dividend pay-out ratio of at least 65 percent of equity free cash flow.

For 2014, it expects 2-3 percent year-on-year growth in revenue and adjusted EBITDA.

Deutsche Bank (Xetra: 514000 - news) and UBS (NYSEArca: FBGX - news) are joint global coordinators and joint bookrunners for the IPO, with Morgan Stanley and Berenberg additional joint bookrunners. Vontobel is co-lead manager, while Lilja & Co. is the independent adviser to CVC and Sunrise.

($1 = 1.0179 Swiss francs) (Aditional reporting by Oliver Hirt; Editing by Michael Perry and Stephen Coates)