Rusal roadshow starts ahead of Hong Kong listing
Rusal has suffered from a slump in aluminium demand, and been weighed under by a heavy debt burden. But in the past year that owner Oleg Deripaska has taken on the key executive management role, with December’s debt restructuring deal now bringing a more positive outlook to the lowest-cost producer in the sector.
Denis Mushtaev, Senior Analyst at IFC Metropol says that is boosting interest in increased interest in Rusal’s long awaited offering.
“The company managed to restructure its debts. It's also benefiting from rising aluminium prices. The company succesfully finalized cost cutting for the production of 1 ton of aluminium. That's why we think that, despite risks, investment in the company is reasonable.”
Rusal is planning to raise $2.6 billion when it lists in Hong Kong. The roughly 10% stake is expected to sell in the Hong Kong $9.10 to $12.50 corridor, or between $1.17 to $1.60. The company says the Hong Kong placement is part of its long-term strategic development plan, according to deputy CEO Artem Volynets.
"The reason for us being in Hong Kong is primarily strategic. They're strategic because China is central to our future growth, because being here will help us to become hopefully a household name for the main Chinese customers and be an Asia company first and foremost. Eighty per cent of our major and most competitive cost capacity in Asia and our major growth is in China.”
Rusal has already found strategic investors for more than half of the placement. They include Vnesheconombank, New York Hedge Fund Paulson & Co, and investment magnates Nathaniel Rothschill and Robert Kuok. Trading is set to start on the 27 of January. Funds raised from the placement will mainly be used to satisfy obligations to creditors.