United Company RusAl secured agreement with creditors in Russia’s biggest ever debt restructuring, paving the way for the indebted aluminum group to raise about $2 billion in a share issue, banking sources said Wednesday.
RusAl ended almost a year of tortuous negotiations on its $7.4 billion foreign debt when a British fund agreed this week to join more than 70 international lenders in the restructuring, the sources said.
“Approval has been received from the final creditor,” said one of three banking sources who spoke on condition of anonymity. “The agreement will be signed soon.”
Deripaska built United Company RusAl into the world’s largest aluminum producer before a collapse in global metals prices left the company unable to service debts that now exceed $16 billion.
The company’s success in restructuring the foreign portion of this debt is viewed by many analysts as a bellwether of investor appetite for prolonged exposure to Russian risk in a country where the state is unlikely to give up key assets held as collateral.
London-based hedge fund BlueCrest Capital Management, owed as much as $100 million, was the last creditor to sign off on the restructuring, Vedomosti said when it reported the accord earlier, citing an unidentified person close to RusAl.
RusAl spokeswoman Vera Kurochkina declined to comment. Calls outside office hours to BlueCrest, were not answered.
RusAl plans to list about 10 percent of its shares in Hong Kong and Paris this year or early next and has already secured state support for the IPO. State bank Vneshekonombank, another major creditor, has pledged to buy a 3 percent stake when it floats.
VEB is prepared to buy the stake at a price valuing RusAl at between $16.3 billion and $20.9 billion, a government source said Nov. 19.
Sberbank said Wednesday that it also was considering buying shares in aluminum giant RusAl via its initial public offering. “We will probably take part in the IPO. The company is stable, its market capitalization will rise. It is interesting from an investor’s point of view,” Gref said.
Funds raised will help the company pay down some of its debt pile, but the IPO could not go ahead until the debt deal with international lenders was agreed.
Finance Minister Alexei Kudrin, who confirmed VEB’s intentions Nov. 25, said Deripaska could surrender majority ownership of RusAl when the deal goes ahead, although he would retain operational control.
“This is a crucial event for top Russian corporates, giving a positive indication that there is room for friendly talks with global creditors,” said Luis Costa, an emerging-market debt strategist at Commerzbank in London. (Reuters, Bloomberg)