Green Light for Rusal IPO

Hong Kong. Russian metals giant UC Rusal has won conditional approval for a $2 billion initial public offering in Hong Kong, sources said on Friday, ending weeks of uncertainty over the sale.

The company, the world’s biggest producer of aluminium, was given the green light by the committee after weeks of deliberation, but the sources said the Securities and Futures Commission would have the final say.

The Hong Kong bourse held off approving the sale at least three times since late November, reportedly amid concerns about Rusal’s $16.8 billion debt.

Sources said on Thursday that the SFC had proposed that the IPO should not be offered to retail investors.

The company, controlled by the industrial tycoon Oleg Deripaska, earlier this month refinanced borrowings of $7.4 billion with foreign lenders, but has an outstanding $4.5 billion debt with state bank VEB due in 2010.

Rusal, the world’s largest aluminium producer, has also fended off allegations that chief executive Oleg Deripaska was linked to organized crime. He has not been charged with any crime.

Last month, the company said it reached a deal with creditors to restructure its massive debt, racked up when metal prices were at record highs before the financial crisis hit last year.

Rusal’s share sale would be the first IPO by a Russian company in the southern Chinese city.

AFP, Reuters

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