Bankers expect midpoint price for Rusal shares
Russian aluminium firm Rusal is likely to be priced at the midpoint of its range when it lists on Hong Kong's stock exchange next Wednesday.
Rusal's listing document indicated the shares would be sold at between HK$9.10 and HK$12.50 each, and bankers close to the deal expect the stock to be priced at HK$10.80, in line with expectations.
'I don't think the price will change much from here before the offer closes, but there is an outside chance of this happening,' one banker said.
Rusal, which is controlled by Oleg Deripaska, is listing 10 per cent of the company, or 1.6 billion shares, with a dual listing in Hong Kong and Paris-based Euronext Exchange.
Rusal may expand the offer by a further 225 million shares to meet demand, its listing document says.
The offer was due to close in Hong Kong at 5pm yesterday and 3pm in London but with big issues the offer period could be extended a few hours. Pricing is to be finalised today.
The listing would raise about HK$17.3 billion for Rusal, which will use the funds to pay down its US$14.9 billion in debt to Russian banks and about 74 other international banks and financial institutions.
Bankers close to the deal also said the offer, the first in Hong Kong by a Russian company, was two times subscribed at the upper price range and three times subscribed at the lower levels.
The offer was 40 per cent filled by cornerstone investors, with Russian state bank VEB buying almost one-third of the offer and Li Ka-shing weighing in with US$100 million. Other big names included European hedge fund manager Nathaniel Rothschild, New York billionaire John Paulson and Malaysian tycoon Robert Kuok, the controlling shareholder of Kerry Group, which owns the South China Morning Post.
The deal has received heavy scrutiny due to the company's huge debt burden, the colourful past of its controlling shareholder and the lack of familiarity with Russian companies in Hong Kong.
Deripaska (pictured) has been accused of having links with organised crime and is in dispute in the London courts with Michael Cherney, who claims Deripaska owes him about 13 per cent of Rusal shares. Deripaska denies both claims.
The Securities and Futures Commission has discouraged retail investors from participating in the deal and ruled the shares could only trade in board lots worth at least HK$200,000.
