Rusal prepares for London IPO

Russia's Rusal, the world's largest aluminium producer, on Thursday took the first concrete steps towards a flotation on the main market of the London Stock Exchange in what could be the biggest initial public offering globally this year. The company had previously said that it planned an IPO within three years but Rusal was on Thursday poised to officially appoint six investment banks to manage the offering, to take place by the end of the year, possibly in November, according to people familiar with the matter. Morgan Stanley, Deutsche Bank and JPMorgan are set to be appointed global coordinators of the deal, and UBS, Credit Suisse and Goldman Sachs the bookrunners. The offering of 25 per cent of Rusal could raise as much as $9bn, according to sources close to the situation. In a departure with most other Russian companies that have pursued listings in London, Rusal will conduct a primary listing of ordinary shares on the main stock exchange. Most companies from the region have tended to issue of global depositary receipts – which have less onerous requirements. Rusal's plans come amid growing concerns in some corners of the City about the quality of recent London listings, many of which have come from the former Soviet Union. Kazakhmys, the mining company from Kazakhstan, is the only company from the region to currently have a primary listing, although Eurasian Natural Resources Corporation, another Kazakh miner, is also considering pursuing a primary listing. The UK's Financial Services Authority plans a discussion document, probably in November, to examine the broader question of the quality of the London markets. The pressure for greater disclosure has already led to some changes. For instance, FTSE International, owned by the Financial Times and the LSE and operator of the market indices, has said it will tighten criteria for membership of the main indices, requiring a commitment to voluntary codes such as the Combined Code of corporate governance. Rusal is two-thirds owned by Oleg Deripaska, a prominent Russian businessman, while businessmen Viktor Vekselberg and Len Blavatnik also have significant stakes. Ahead of the flotation, Rusal is actively recruiting non-executive directors, including a London-based chairman, who will take over from Mr Vekselberg, currently in the role. Rusal became world's largest aluminium producer after it took over last year Siberian-Urals Aluminium, or Sual, and bought the aluminium assets of Glencore, the Swiss commodities trader,. That deal gave Rusal a valuation of about $30bn.