Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

RusAl Declares Plans for IPO This Year

bloombergMen working at RusAl's Krasnoyarsk aluminum smelter. Building of a new smelter in Boguchany started Tuesday.
United Company RusAl -- the world's biggest aluminum producer -- plans to hold an initial public offering of its shares in November, Interfax cited the company's board chairman Viktor Vekselberg as saying Tuesday.

Vekselberg said the parameters of the IPO could be announced in August or September, RIA-Novosti reported. He said the actual size of the stake to be sold was not of crucial importance to the company's executives.

"The main thing for us is to become a publicly listed company," he said, RIA-Novosti reported.

The company, majority owned by billionaire Oleg Deripaska, produces some 12 percent of all aluminum manufactured worldwide. At the time of the merger the companies said they planned to float a chunk of the combined company's stock, possibly in London.

Analysts have suggested that the disclosure requirements of an international listing could prove prohibitively grueling for the company. The industry from which RusAl emerged was infamous in the 1990s for questionable business tactics and violence.

Also Tuesday, RusAl CEO Alexander Bulygin said the company would consider bidding for Russian energy assets to power its growing capacity to produce the light metal.

RusAl also began construction Tuesday of the $2.3 billion Boguchany smelter -- one of five plants in Siberia it believes will produce 1 million tons of aluminum annually within five to seven years.

"We are laying a stone for the first stage of the Boguchany plant, but I believe there will be a second and a third stage," Bulygin told reporters in Boguchany.

The Boguchany smelter will initially be able to produce 600,000 tons per year, a level it will reach in the second quarter of 2011 after commissioning in December 2009. This year alone, investment in the project will be about $195 million.

It is part of the Boguchany energy and metal project being developed by RusAl and Hydro OGK, one of the world's biggest hydroelectric power firms, which was spun off from former energy monopoly Unified Energy Systems under sector reforms.

Bulygin said RusAl might be interested in bidding for other power assets as part of the restructuring.

"We are interested in possibilities for increasing the capability of existing energy assets, rather than building new assets," he said. "We are examining the possibility of participating in the privatization process."

This year, RusAl expects to produce about 4 million tons of aluminum. Bulygin identified its Sayanogorsk, Bratsk and Krasnoyarsk plants, plus a new smelter being built in Taishet, as the other four potential million-ton plants.

The Boguchany plant, 550 kilometers northeast of Krasnoyarsk, will be the main consumer of energy from a 3,000-megawatt hydroelectric power plant being built on the Angara, the only river flowing out of Lake Baikal.

"Energy is key for us, and therefore we are examining different projects linked to energy: hydro energy, thermal energy, gas, coal and atomic energy," Bulygin said.

Asked about a potential merger of its two largest rivals, Alcoa and Alcan, Bulygin said RusAl would not necessarily expand just to stay the largest producer.

"We are not going to participate in a race, as our goal is not to produce 7, 10 or 20 million tons of aluminum," he said.

"We are not purely an aluminum company. We are an energy and metals company."

AP, Reuters