Exchange defers Rusal listing approval again
The Hong Kong stock exchange has for the second time deferred a decision on whether to allow Rusal, the world's largest aluminium company, to go ahead with its initial public offering.
'The [share sale] has not been rejected, it has just been deferred. The listing committee wants more clarity on the restructuring of the debt,' said a person familiar with the situation.
A finance executive said it was unlikely that Rusal would be listed this year. 'The time frame is too tight,' he said.
The firm had been hoping to start marketing its shares to investors today and begin trading on December 23. The listing is now expected to take place in January, but executives will be hoping market and investor sentiment remains buoyant until then.
The listing committee first deferred a decision on November 26 because not all foreign creditors had signed off on the company's debt.
At that meeting, Rusal had secured agreement for the restructuring of 98.5 per cent of the US$7.4 billion it owed to foreign creditors. Including Russian banks, Rusal owes US$16.8 billion, which it said last week had been restructured.
Although the terms of the restructuring, the biggest and most complex undertaken by a Russian company following the financial crisis, were agreed with the major creditors in July, the last of the creditors only signed off last week.
Rusal is looking to sell 10 per cent of its shares to raise about US$2 billion from its listing in Hong Kong and on the Paris-based Euronext market. Most of the proceeds from the share offer will go towards repaying debt.
If successful, Rusal will be Hong Kong's first listed Russian company and could pave the way for further listings from Russia and Kazakhstan, the exchange hopes.
But as the first Russian listing, it is understood the listing committee is anxious to avoid any glitches and is scrutinising it carefully.
As part of its listing plans, Rusal is expected to announce today the appointment of Barry Cheung Chun-yuen, the chairman of the Hong Kong Mercantile Exchange, and former secretary for justice Elsie Leung Oi-sie as independent non-executive directors.
However, since the listing has been deferred, the announcement may be put off until later.
This is the third attempt by the company's chief executive and controlling shareholder, Oleg Deripaska, to list the company.
Deripaska has tried to list Rusal in London in 2007 and in Hong Kong in November last year but had to withdraw because of weak market conditions.
Bank of America Merrill Lynch, BNP Paribas, BOC International, Credit Suisse and VTB Capital are the deal bookrunners. BNP and Credit Suisse are also the sponsors. Other banks are taking part in the deal in Moscow and Paris.
The company has been trying to attract Chinese and Asian investors as cornerstone investors.
But so far, only Russian state bank Vnesheconombank, which bailed out Rusal in October last year with a US$4.5 billion loan, has shown interest, saying it will take 3 per cent of the listing shares, while Sberbank, one of the Russian banks underwriting the issue, has said it may invest.
Last year, Rusal was bailed out by Vnesheconombank with a loan of, in US$: $4.5b