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Two Russian tycoons selling 3 percent of aluminum producer Rusal

Wednesday, Oct 11, 2017

Russian tycoons Mikhail Prokhorov and Viktor Vekselberg are selling a 3-percent stake in Russian aluminum giant Rusal via accelerated bookbuilding (ABB), one of their bookrunners said on Tuesday.

The announcement of the ABB deal, which usually takes only a few days, comes less than a week after Russia’s En+ Group, which owns a 48 percent stake in Rusal, said it would launch an initial public share offering in London and Moscow.

Prokhorov is offering 0.7 percent in Hong Kong-listed Rusal and Vekselberg is offering 2.3 percent, the bookrunner said.

The market value of the 3 percent stake is $341 million, based on the closing price of Rusal’s share of HK$5.84 on Tuesday. Its shares fell 2.8 percent in Hong Kong during the day, but are still up more than 70 percent since the start of 2017.

Rusal and Onexim Group, which manages Prokhorov’s assets, declined to comment. Renova Group, which manages Vekselberg’s assets, and En+ Group, which manages Russian tycoon Oleg Deripaska’s aluminum and hydropower businesses, did not respond to a Reuters request for comment.

“Prokhorov has indicated previously that he was willing to sell his stake in Rusal, while Vekselberg might be willing to benefit from Rusal’s share growth this year,” said Oleg Petropavlovskiy, an analyst at BCS investment bank.

The deal could increase the liquidity of Rusal’s shares in Moscow and make it easier for Rusal to get into the prestigious MSCI Russia Index, he said.

Rusal’s Moscow-listed shares were down 4.8 percent after the announcement, on track for their worst day since March.

The planned listing of En+ will be the first major IPO of a Russian company in London since 2014, when Russia annexed Ukraine’s Crimea region. En+ aims to raise $1.5 billion, of which $1 billion is expected to be new capital.

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