Rusal Ready to Offer to Repay VEB Debt With Convertible Bonds

Sept. 7 (Bloomberg) -- United Co. Rusal is ready to revisit its offer to repay $4.5 billion to state-run Vnesheconombank, the company’s biggest creditor, through an issue of convertible bonds, according to Oleg Deripaska, the largest shareholder. Prime Minister Vladimir Putin’s government rejected the offer last year by Rusal, the world’s largest make of aluminum, Deripaska told the Moscow-based Vedomosti newspaper. Deripaska’s comments, published today, were confirmed by Rusal spokeswoman Vera Kurochkina. Putin chairs VEB’s supervisory council. “If in a year when we need to repay the loan, the government recalls the idea, we’ll be happy to discuss it again,” Deripaska said. Rusal’s one-year loan with VEB makes up about a third of its debt, while more than 70 foreign lenders are yet to reach a final accord on restructuring $7.4 billion owed by the company. A one-year extension agreed with VEB in June helped spur debt talks, Rusal Chairman Viktor Vekselberg said in June. A sale of convertible bonds to VEB would allow the state to take a stake in Rusal, which is owned by Deripaska together with billionaires Vekselberg, Mikhail Prokhorov and Swiss trader Glencore International AG. Rusal offered earlier this year to swap all or part of VEB’s loan into convertible bonds, which the state lender could exchange for preferred shares. The idea of the state holding a stake in a business is “a beneficial one for private companies. We’re seeing it left, right and center in the U.S.,” Deripaska told the newspaper.