Rusal’s HK$20.1 Billion Share Sale Said to Be Fully Subscribed

Jan. 15 (Bloomberg) -- United Co. Rusal, seeking to raise as much as HK$20.1 billion ($2.6 billion) selling shares in Hong Kong, won pledges from investors equal to all the stock it’s offering, said two people familiar with the matter. The initial public offering is fully subscribed within Rusal’s price range of HK$9.10 to HK$12.50 a share, said the people, who declined to be named because the discussions with investors are private. Moscow-based Rusal has completed marketing the IPO in Asia and plans to continue meeting investors in Europe this week, the people said. The aluminum producer, controlled by billionaire Oleg Deripaska, aims to be the first Russian company to list in Hong Kong, and intends to have its depositary receipts trade in Paris. Retail investors are barred from the IPO, which was delayed by regulators at least twice on concern about the company’s $14.9 billion of debt. Nathaniel Rothschild, New York hedge fund manager Paulson & Co., Russian state-owned development bank Vnesheconombank and Malaysian billionaire Robert Kuok are among investors that agreed to buy the shares. The so-called cornerstone investors are guaranteed shares in return for a pledge not to sell them for a specified period. Cheung Kong (Holdings) Ltd., controlled by billionaire Li Ka-shing, will buy $100 million worth of Rusal shares that won’t have a lock-up period. Norilsk Stake Vera Kurochkina, a Rusal spokeswoman, declined to comment. Rusal plans to reduce its debt with the IPO’s proceeds. Its borrowings almost doubled after Rusal bought a quarter of OAO GMK Norilsk Nickel before commodity prices collapsed in 2008. “There is still a misconception that Rusal is in financial difficulty,” Artem Volynets, Rusal’s deputy chief executive officer, corporate strategy, said in Hong Kong on Jan. 11. “It is not. The company is in a stable financial position. We’ve reduced our costs, aluminum prices have risen and we have restructured our debt.” Rusal posted a net loss of $868 million in the first half of 2009, compared with net income of $1.4 billion a year earlier. Profit won’t be less than $434 million for 2009, it said in its IPO prospectus.