Rusal says finances 'stable' as it eyes IPO
By Jeremiah Marquez |
January 12, 2010, Tuesday
|
Print Edition
Print Edition
UC Rusal executives offered new assurances yesterday about the Russian aluminum giant's ability to pay off massive debts, saying its finances were "very stable."
Rusal is seeking to raise nearly US$2.6 billion through an initial public offering in Hong Kong this month. Hong Kong regulators imposed a host of restrictions on the offering amid widespread concerns about Rusal's US$14.9-billion debt.
Artem Volynets, a deputy chief executive at Rusal, said he was "very comfortable" with the company's debt. He said a combination of cost cutting, rising aluminum prices and Rusal's recent debt restructuring had put the company in better financial shape.
"There is still a misconception that Rusal is in financial difficulty. It is not," Volynets told reporters in Hong Kong. "The company is in a very stable financial position."
Moscow-based Rusal - run by tycoon Oleg Deripaska - is seeking to sell more than 1.6 billion shares at a price between HK$12.50 (US$1.61) and HK$9.10, according to a filing with Hong Kong's stock exchange. Potential proceeds range from US$1.9 billion to US$2.6 billion.
Under Hong Kong's restrictions, prospective buyers are limited to professional investors and those willing to purchase at least HK$1 million in shares. To start, shares will only be traded in blocks worth nearly US$26,000.
The company said it plans to use the IPO proceeds to pay creditors.
Executives said the firm would be able to raise more capital, by issuing more equity or debt, if needed.
Rusal ran up heavy debts during the credit boom that preceded the world financial crisis. Now it's struggling to pay. The company reached a restructuring deal with creditors in early December to repay its US$16.8 billion borrowing in seven years.
Rusal is seeking to raise nearly US$2.6 billion through an initial public offering in Hong Kong this month. Hong Kong regulators imposed a host of restrictions on the offering amid widespread concerns about Rusal's US$14.9-billion debt.
Artem Volynets, a deputy chief executive at Rusal, said he was "very comfortable" with the company's debt. He said a combination of cost cutting, rising aluminum prices and Rusal's recent debt restructuring had put the company in better financial shape.
"There is still a misconception that Rusal is in financial difficulty. It is not," Volynets told reporters in Hong Kong. "The company is in a very stable financial position."
Moscow-based Rusal - run by tycoon Oleg Deripaska - is seeking to sell more than 1.6 billion shares at a price between HK$12.50 (US$1.61) and HK$9.10, according to a filing with Hong Kong's stock exchange. Potential proceeds range from US$1.9 billion to US$2.6 billion.
Under Hong Kong's restrictions, prospective buyers are limited to professional investors and those willing to purchase at least HK$1 million in shares. To start, shares will only be traded in blocks worth nearly US$26,000.
The company said it plans to use the IPO proceeds to pay creditors.
Executives said the firm would be able to raise more capital, by issuing more equity or debt, if needed.
Rusal ran up heavy debts during the credit boom that preceded the world financial crisis. Now it's struggling to pay. The company reached a restructuring deal with creditors in early December to repay its US$16.8 billion borrowing in seven years.
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