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. Last Updated: 07/27/2016

RusAl Considering Private Placement This Year

DAVOS, Switzerland — United Company RusAl may sell shares in a private placement as it seeks to refinance about $16.3 billion of debt, billionaire shareholder and chairman Viktor Vekselberg said Saturday.

The company owes $7 billion to foreign banks, about $6.5 billion to domestic lenders and about $2.8 billion to Mikhail Prokhorov's Onexim Group, Vekselberg said in an interview. RusAl is in "active" talks with creditors and may agree on a refinancing of bank loans within three months, he said.

Vekselberg said RusAl would cut output by as much as 10 percent and freeze investment for about three years. Oleg Deripaska, the company's majority owner, returned as RusAl's chief executive officer earlier this month after the lightweight metal fell to a five-year low.

Profit may slump 88 percent to $476 million this year, according to ING. Aluminum must trade at $1,700 per ton for RusAl to service its debt and pursue new projects, Vekselberg said. He forecast that prices would reach $2,000 this year.

Aluminum for delivery in three months was 1.2 percent lower at $1,350 a ton Saturday on the London Metal Exchange.

RusAl plans to repay Prokhorov in cash and RusAl shares, Vekselberg said. Russia's government may act as guarantor for debts to local and foreign banks, he added.

The turmoil in financial markets means that RusAl probably will not hold an IPO this year, he said.