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. Last Updated: 07/27/2016

RusAl Plans To Use IPO To Pay Debt

United Company RusAl intends to use 80 percent of the proceeds from a planned stock listing in Hong Kong to pay back debt, a source close to the company’s shareholders said Monday.

“They plan to place 10 percent of shares in Hong Kong. Serious preparations are under way in order that this can be done by the end of the year,” the source said, speaking on condition of anonymity.

The source said the benchmark for RusAl’s valuation would be Aluminum Corp of China Ltd.

RusAl would not comment.

The source would not say whether RusAl had signed a mandate with the placement organizers.

The total debt of RusAl, the world’s top aluminum producer, is estimated at $16.8 billion. The company is in talks with banks on restructuring.

RusAl said Sept. 18 that it hoped to finalize the terms of its restructuring with creditors by the end of October. The firm has several times extended standstill deals on debt repayment pending a resolution to the restructuring.

Sources said last month that RusAl expected proceeds from its share placement to be $1.5 billion to $2.5 billion.

Aluminum Corp of China, the world’s third-largest aluminum producer, has a market capitalization of $22 billion.

RusAl is majority owned by billionaire Oleg Deripaska.