Hong Kong tycoon looksto buy $100m of Rusal stock
Russian aluminium Franchise wants to raise up to $2.6b in IPO
Hong Kong : The flagship company of Li Ka-shing, Hong Kong's richest man, has put in an order for $100 million (Dh367 million) of shares in UC Rusal, the Russian aluminium group controlled by Oleg Deripaska that plans to float on the city's stock market.
Rusal is hoping to raise up to $2.6 billion in an initial public offering on the Hong Kong stock exchange. The company's road show kicked off earlier this month. Trading in its shares is expected to begin on January 27.
According to one person close to the transaction, Cheung Kong Holdings has offered to buy $100 million of Rusal shares regardless of the offer price.
The Russian company has set a broad price range for its shares, which will be set at HK$9.10 to HK$12.50 ($1.17 to $1.61), representing an enterprise value of 10 to 14 times this year's projected pre-tax profits.
Cheung Kong, UC Rusal and the listing's joint sponsors BNP Paribas and Credit Suisse declined to comment. Cheung Kong is not guaranteed to receive all of its ordered allotment.
Rusal is selling just 10 per cent of its shares to outside investors, having secured a waiver from the Hong Kong stock exchange's normal requirement that listed companies maintain a 25 per cent free float.
In addition, more than 40 per cent of the shares on offer have been reserved for four cornerstone investors.
Vnesheconombank, the Russian state bank chaired by prime minister Vladimir Putin and Rusal's largest creditor, has agreed to subscribe to 477 million shares, or 30 per cent of the offering.
Nathaniel Rothschild's private investment vehicle and Paulson & Co, the New York-based hedge fund run by billionaire John Paulson, have both agreed to subscribe to $100 million worth of Rusal shares.
Robert Kuok, the Hong Kong tycoon, has pledged to buy shares worth $20 million. Rusal is hoping to become the first Russian company to list in Hong Kong but there are concerns about its debt of $14.9 billion.
The IPO is vital for the company as it comes at a time when the aluminium industry is suffering from overcapacity and falling demand.
— Financial Times
