RUSAL seeks to reassure investors post IPO-sources

MOSCOW, Feb 9 - RUSAL <0486.HK>, the world's largest aluminium firm, sought to reassure investors as its shares traded 20 percent below its January listing price, sources familiar with RUSAL's presentation said on Tuesday.

The Russian company raised $2.2 billion in a Hong Kong initial public offering last month to repay some of its debts [ID:nLDE60K2NJ].

It has since then lost a fifth of its value because of global market jitters, investors' exodus from risky assets and a fall in aluminium prices.

The sources said RUSAL reassured investors in a presentation that the current aluminium prices will allow it to recommission 100,000 tonnes of mothballed annual aluminium capacity in the first quarter of 2010.

That would leave RUSAL with some 0.6 million tonnes of mothballed annual capacity at some plants, where the costs of producing a tonne of light metal is equal or exceeding $1,950.

"That means they are on the edge of a breakeven," one of the sources said.

RUSAL bet heavily on an aluminium price rally to rescue its IPO [ID:nGEE5B70MO] and sold its stock when the price of the metal hit over $2,240 per tonne compared with $2,070 on Tuesday and as low as $1,977 last week.

RUSAL's major shareholders are tycoons Oleg Deripaska, Mikhail Prokhorov, Viktor Vekselberg and Len Blavatnik, Swiss-based commodities trader Glencore and the Russian state-run bank VEB.

One source also told Reuters that RUSAL produced 3.9 million tonnes of aluminium last year, in line with its plan to cut output by 500,000 tonnes in 2009 from 4.4 million tonnes produced in 2008.

UC RUSAL could not be reached for comment.

RUSAL has repaid $2.14 billion owed to creditors, reducing its total debt to $12.9 billion after raising funds via the IPO. [ID:nTOE60Q02O]

One source said RUSAL will try to increase the liquidity of its shares by seeking to persuade the Hong Kong exchange to drop its requirement that RUSAL share lots should be no smaller than HK$200,000. Other sources could not confirm that.

Shares of RUSAL closed 0.5 percent higher on Tuesday at HK$8.7 compared with the IPO price of HK$10.80.