RUSAL plans 2010 IPO in spite of retail ban

* Russia's RUSAL wins Hong Kong IPO approval - sources * Regulator says cannot market shares to retail investors * RUSAL to push on regardless with January roadshow By Kennix Chim HONG KONG, Dec 18 (Reuters) - Russian aluminium company UC RUSAL will push ahead with its $2 billion Hong Kong IPO, even though a ban on a retail offering means the deal is effectively little more than a Russian state bailout. The world's largest aluminium producer will proceed with marketing the IPO in January after Hong Kong's Securities and Futures Commission (SFC) decided late on Friday night to approve the controversial float, but on condition ordinary investors are left out of it, two sources told Reuters. Regulator concern was raised by RUSAL's $4.5 billion loan from Russian state bank VEB, which is due to be repaid next year, as well as a London lawsuit against the aluminium giant's owner, Oleg Deripaska, that could potentially see a stake sold to former business associate Michael Cherney. A Moscow source close to the IPO process shrugged off the decision to ban a retail offering, saying RUSAL would push ahead with the IPO in early 2010 and already had some institutional investor backing. "The SFC decision of no offer to retail investors via the (Hong Kong) tranche does not have an impact on the company's target institutional investor group as well as on its listing plan and valuation," the source told Reuters. RUSAL declined to comment. BAIL OUT? Analysts, however, have said the success of the RUSAL IPO may rely heavily on the Russian government, which rescued the company when a collapse in demand for aluminium sent it into a debt nightmare in 2008. State bank VEB, which bailed out the group with the $4.5 billion loan, has already agreed to buy nearly a third of the 10 percent of shares on offer. RUSAL is due to repay the sum in October next year, but a banking source said the company had assured the regulators that Russia's biggest lender, state-controlled Sberbank , would be able to refinance the debt. Earlier this month, RUSAL refinanced $16.8 billion debt with foreign and Russian lenders, a key stage in its recovery from near collapse. RUSAL would be the first Russian company to list in Hong Kong, which is keen to attract overseas funds, but the lack of retail investor participation could be a blow to the country's growth plans. Hong Kong's population are famously enthusiastic about IPOs, often lining up at banks to grab a share or two of popular offerings. Small investors are also notorious for publicly venting their outrage when they feel regulators have let them down. (Additional reporting by Polina Devitt; Writing by John Bowker in Moscow; Editing by Dan Lalor and Simon Jessop)