RusAl has been looking to pay down some of its debts by raising at least $2 billion through an initial public offering that would make it the first Russian company listed in Hong Kong.
However, the local stock exchange declined to approve the listing on Monday, a person familiar with the matter said. The person spoke on condition of anonymity because of the sensitivity of the matter.
As a result, the IPO is likely to be delayed until next year, the person said.
The stock exchange declined to comment.
A day after the setback, the company — run by billionaire Oleg Deripaska, once Russia's richest man — announced the appointments of two well-connected Hong Kongers as independent, nonexecutive directors to its board.
The first is Elsie Leung, who formerly served as Hong Kong's secretary of justice, the Chinese territory's top law enforcement official.
The other is Barry Cheung, head of the Hong Kong Mercantile Exchange. He also chairs or serves on several high-profile Hong Kong committees, including the city's Urban Renewal Authority.
"Given RusAl's long-term strategic interest in the markets of China and Asian region in general, it is logical to add the expertise of [Leung and Cheung] to reinforce the team," the company said in an e-mailed response to questions.
Last week, RusAl announced a landmark deal to restructure its $17 billion in debt as it sought to go public in Hong Kong by the end of the year.
Deripaska is estimated by Forbes magazine to have lost some $24 billion of his fortune during the financial crisis because of high debt.
On Tuesday, President Dmitry Medvedev's economic adviser said the country's largest banks, Sberbank and VTB, were planning to buy shares of RusAl in the upcoming IPO, according to Russian media reports. State-owned lender VEB earlier said it would seek to buy 3 percent of the offering. VEB bailed out RusAl last year by providing a crucial $4.5 billion loan.
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