RUSAL IPO may value company at $30 bln
MOSCOW. Sept 28 (Interfax) - The board of directors of United Company RUSAL (UC RUSAL) gave provisional approval to conduct an IPO in Hong Kong before the end of the year that could value the aluminum giant at up to $30 billion, the Wall Street Journal reported on Monday.
London's Sunday Times reported yesterday that a final decision on placement of 10% of RUSAL shares in Hong Kong is expected to come at board meeting this week. The placement is contingent on completing debt restructuring talks with creditors, the newspaper said.
RUSAL spokeswoman Vera Kurochkina told Interfax: "Currently there has been no decision on the timeframe for the placement, its location or other details of the potential IPO."
RUSAL hopes "to attract state-backed investors such as China's sovereign funds and Singapore's Temasek Holdings Pte. Ltd., as well as private buyers," the Wall Street Journal said.
"Such a sale would be another sign that financial markets world-wide have improved significantly since the depths of the credit crisis," it said.
"Last week, foreign lenders were angered when RUSAL agreed to pay $85.9 million to settle overdue debts to Russia's Alfa Bank, which had filed bankruptcy suits in Russia against RUSAL units," the Wall Street Journal said, adding: "Some creditors believe the restructuring talks could continue through the end of the year." RUSAL "chose Hong Kong for the primary listing in the hope of capturing a higher valuation, according to people close to the company," it said. "The sale would provide the debt-burdened company with much-needed cash."
Deripaska would retain a controlling stake after the offering, the Wall Street Journal said.
The Sunday Times reported that "advisers at Credit Suisse and Goldman Sachs are ready to file a prospectus before the end of the week if the board gives the green light"and that "formal marketing would start in November ahead of a projected pricing of the shares and listing in December."
RUSAL "is understood to have opted for Hong Kong partly because of a lawsuit in London in which Mikhail Chernoy, a former associate of Deripaska, is claiming more than $4 billion-worth of shares. The Asian bourse has also seen huge demand from Chinese investors and institutions for metals stocks," the newspaper said.
"As part of a three-way merger in 2006 with rival SUAL and the aluminium assets owned by Glencore, the Swiss commodities trader, Deripaska pledged to list the combined group by December 31," the London Times said. "If it does not go ahead, Deripaska has to buy their shares at a price based on a valuation of the company at $30 billion to $35 billion."
RUSAL has said on a number of occasions that it is technically ready for the IPO. RUSAL's director for capital markets, Oleg Mukhamedshin, said previously that the company planned to reduce its debt in part via an IPO.
Hong Kong has long figured in market rumors concerning the location for RUSAL's listing and Basel executives have in the past expressed interest in the exchange.
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