UC Rusal float plan dealt blow by Asia delay

Oleg Deripaska’s plans to float his UC Rusal aluminium group by the end of the year received a blow on Thursday after the Hong Kong Stock Exchange postponed a decision to approve it until December 3. But people close to the situation insisted the company was still on track to start trading in Hong Kong and Paris by December 23 as planned, despite having to push back the start of an official roadshow a week to December 7 for the initial public offering of up to 10 per cent of the stock. Nov-26The postponement by the Hong Kong Stock Exchange came as the company was still scrambling to complete a restructuring of nearly $17bn in debts owed to more than 70 foreign and Russian creditors. An agreement had been expected in time for the hearing in Hong Kong on Thursday, but now the deal may be finalised early next week. The company wants to raise about $2bn to start paying down debts, but it cannot undertake an IPO until the restructuring agreement is complete. “The result was that Hong Kong told us to come back when the deal was complete,” said one insider. The exchange also had “a few outstanding questions” on disclosure issues surrounding the company, which has been dogged by Mr Deripaska’s past partnerships in the aluminium industry and a London High court lawsuit for a stake in the company. “There isn’t any particular concern,” said another person close to the situation. “But this is the first Russian company they’ve looked at and it is probably not the simplest ... It is not a surprise.” Momentum was growing behind the IPO, they said, particularly from potential cornerstone investors, including western household names and Chinese institutions. Russia’s VEB, the state-owned bank, has already indicated it could buy a 3 per cent stake in the company as part of the offering. Preplacement of shares with these “cornerstone” investors is fuelling hopes there will be enough time to market the company to other investors in time to price by mid-December. “If we can get a significant portion of the shares already spoken for, it becomes easier to shake the trees for the rest,” said one person close to the situation. Improving global market conditions over the past few weeks have also seen the company’s valuation prospects improve to near a band between $15bn to $20bn as investors warm to the low-cost aluminium producer. But fears over market conditions could hit again after investors fled from risk on Thursday over Dubai World jitters. Copyright The Financial Times Limited 2009. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.