Credit turmoil forces Rusal to delay listing

United Company Rusal, the world's largest aluminium producer, has decided to put its planned London listing on hold because of market conditions. The group had hoped to raise more than $7.5bn (€5.4bn). The private Russian company, which is 66 per cent controlled by Oleg Deripaska, had planned to sell 25 per cent of its equity. The float would have rivalled the $8bn offering by Russia's VTB Bank in May as the biggest London IPO this year. Two people close to Rusal said the board decided on Wednesday not to proceed with the IPO this year because of market turmoil and liquidity worries. Rusal had planned to file the first draft of its prospectus to the UK Financial Services Authority four weeks ago but had delayed it so it could monitor market conditions. The company has been working on the IPO with a group of six investment banks, led by Morgan Stanley, Deutsche Bank and JPMorgan, for months. Though the main reason behind its decision appears to be market conditions, one banker working on the deal said the company still had to bring its corporate governance and accounting up to the standards required by London fund managers, especially for a primary listing. Rusal needs to hire several independent non-executive directors and find a non-executive chairman before it is ready formally to start the IPO process. Simon Thompson, former head of base metals at mining group Anglo American, is understood to be frontrunner to be chairman but the IPO delay may mean he is no longer interested. Rusal has also faced legal challenges, including filings from Mikhail Cherney, a founding father of Russia's aluminium industry, who has claimed a 20 per cent stake in the company. United Company Rusal was formed in April when Rusal took over smaller Russian rival Sual and the aluminium-related assets of Glencore, the Swiss commodities trader. Rusal said Thursday: "There is no change to the plans we have announced for an IPO to take place within three years of the merger deal closing."