UC Rusal nears $7.4 billion debt revamp ahead of HK IPO: report
UC RUSAL, the world's largest aluminum producer, is close to a deal to restructure $7.4 billion in debt to foreign banks which is crucial for the Russian firm's planned $2 billion IPO in December, a newspaper reported.
Controlled by Russian oligarch Oleg Deripaska, UC RUSAL is seeking a primary listing in Hong Kong and secondary listing in Paris, with investors' meetings starting as early as Nov 30.
The debt deal, which bankers said is probably the largest and most complex of the restructurings undertaken by debt-swamped Russian firms, is likely to be announced as early as next week after approved by creditor banks, the Wall Street Journal reported on Saturday, quoting people familiar with the deal.
All the terms are agreed, it quoted one person close to the talks said.
A RUSAL spokesman declined to comment, the paper said.
The deal, extends over seven years, is aimed at allowing Rusal breathing space to repay $16 billion in debt built up when metal prices were at record highs before the financial crisis hit last year, Wall Street Journal said.
The IPO is aimed at raising cash to help repay creditors.
Hong Kong regulators are expected to approve the company's listing at a regular meeting November 19. Rusal also has applied for a secondary listing in Paris, it added.
UC RUSAL, created in a three-way merger deal in 2007, is struggling with losses and a hefty debt pile after the global recession battered demand for aluminum. It had planned to settle the debt issue by November 12, sources told Reuters. But the deadline has slipped amid tough talks with more than 70 foreign creditors.
November 19 is not a problem, but after that it becomes harder (to do the IPO in 2009), another source familiar with the talks said told Reuters on Friday.
The timing is defined by the Christmas holidays, the company should go public before then, the source familiar with the deal said.
(Reporting by Alison Leung; Editing by Alex Richardson)
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