UC Rusal Readying Terms With Banks Before IPO

The world's largest aluminum company, United Company Rusal, is negotiating terms with six banks ahead of a London flotation, two people familiar with the matter said. The Russian group is finalizing roles on the deal with Morgan Stanley, Deutsche Bank, JPMorgan, UBS, Credit Suisse and Goldman Sachs. The initial public offering is scheduled to take place during the fourth quarter of 2007, one person close to the situation said. Rusal was created earlier this year from the merger of ZAO Rusal, Sual Group and the aluminum assets of Glencore AG, which valued the combined entity at around $30 billion. Following the merger, the company said it planned an IPO within three years. The schedule for the flotation has been accelerated due to pressure from shareholders. Floating 25% of Rusal would net the company around $7.5 billion, the person said. But another person added that the company hadn't yet decided on the size of the stake to be floated. Russian IPOs have been a major driver of the London market this year as company founders have rushed to liquidate their stakes ahead of the country's presidential elections in 2008. But investors have shunned some offerings because they thought the deals were too expensive, or because they have been concerned about corporate governance standards.