Energy group EN+ admits IPO is years off
The on-and-off listing plan of Russian oligarch Oleg Deripaska's energy resources conglomerate, EN+ group and its units in Hong Kong, has been pushed back, according to its chief executive.
Speaking with the South China Morning Post yesterday, EN+ chief executive Artem Volynets blamed the European sovereign debt crisis on souring the world's capital markets at a time when the group was pursuing the planned listing of the group as a whole or its power generation subsidiary, EuroSibEnergo, or possibly both.
The delay pours cold water on Deripaska's ambition to open up more funding channels for his group companies after EN+ spun off the aluminium-making flagship, Rusal, on Hong Kong Exchanges and Clearing in 2010.
'The plans for the listing of EN+ group and/ or companies are still very much in place, but the time is not near yet, not next two to three years,' Volynets said.
EuroSibEnergo, Russia's largest privately-owned power producer, originally pursued the reinstatement of its US$1.5 billion listing plan this year after it was forced to postpone twice last year due to a lack of interest in the firm's shares at its offer price and unfavourable regulatory changes in Russia's power market.
Volynets said that EN+ including Rusal earmarked US$25 billion for investments over the next 15 to 20 years, and the listing delay meant it would turn to other financing options such as bank borrowings, project financing and funding from potential partners in mainland China, South Korea and Japan.
He said the group's financial health remained in 'good' shape, pointing out that Rusal had refinanced its debts in September last year. However, some analysts said that even after the restructuring, Rusal's debts stood at US$11 billion. This is despite the fact that significant principal repayments are not due until 2016.
'We are interested in exploring natural resources in Siberia and supplying them to China, Korea and Japan and Asean countries,' Volynets said. 'Dialogues with a number of partners are underway.'
He meant to explore natural resources such as coal, coking coal and iron ore in Siberia, and build related logistics infrastructure.
Volynets played down the criticism by Rusal's former chairman, Viktor Vekselberg, who stepped down after a falling out with the board over the sale of Rusal's 25 per cent stake in Norilsk Nickel, Russia's largest metal producer.
Vekselberg criticised Rusal for appointing the head of Hong Kong Mercantile Exchange Barry Cheung Chun-yuen as his successor two weeks ago.
But Volynets said that having a Hongkonger as chairman made sense because Rusal was listed in Hong Kong and wanted to expand its presence on the mainland.
'He is the first Hong Kong-Chinese to become the chairman of a Russian company,' Volynets said. 'We hope he will stay with the company as long as he can.'
Cheung was reportedly to be considering an offer of a position in the new administration of the incoming Hong Kong chief executive, Leung Chun-ying.
The amount in US dollars Rusal raised with its IPO in Hong Kong in 2010. There were concerns at the time over its debt of US$14.9 billion