Rusal becomes first Russian firm to list in Hong Kong

Jan 29, 2010

Share with
friends:

Comments (0) Print this article

Rusal, the Russian aluminium producer controlled by Oleg Deripaska, has floated 11% of its equity in Hong Kong, making it the first Russian firm to go public there. The initial public offering (IPO) raised $2.24bn, implying a total market capitalisation of $21bn. This follows two aborted attempts to list, one in London, one in Hong Kong. The shares fell 10% below the IPO price on their first day of trading on Wednesday.  What the commentators said

Lengthy scrutiny meant that Rusal had been on a "long road to Hong Kong", said Tom Mitchell in the FT. Even then, the IPO received regulatory approvals "only after agreeing to unprecedented barriers on retail investor participation" – the minimum order allowed was $129,000. Jackson Wong at Tanrich Securities reckoned that was sensible, as the company "is too complicated for an average investor".

That's for sure, said John Foley on Breakingviews. Like the ore it digs out, Rusal is "mixed with too many unwanted elements". Political risk "is outsized", with the Guinean government trying to claw back money. Deripaska is involved in an ownership dispute. And while the flotation alleviates its debt problems, the burden could still overwhelm the company eventually, said the FT.

Now add this "debacle" of a debut and this has "hardly been a trail of glory" for Rusal, said Jason Bush, also on Breakingviews. It was a weak market but the key problem was the pricing; "it looks like Deripaska and his advisers wanted too much. Still, he won't lose too much sleep. Without an IPO he might have had to relinquish control of the company. Compared to that, a disappointing debut is "trivial".

Comments (0)

Share with
friends:

Related articles

Leave a comment

This will be the name displayed with your comment.

This helps us verify comments are genuine. It will not be displayed anywhere on the site and is stored confidentially.

Please keep your comment within 1,000 characters and relevant to the main topic. We encourage healthy debate, but we don't allow insults or bad language. Anything off topic or unpleasant, we'll remove. Enjoy the conversation! Thank you.

captcha To prevent spam-related comments please enter the characters shown in the 'Captcha' box to the left.

By leaving a comment you accept our terms and conditions.


FREE - MoneyWeek's daily investment emailJohn Stepek

Our free daily email, Money Morning, is an informative and enjoyable analysis of what's going on in the markets. Written by our Editor, John Stepek, and guest contributors.
Sign up FREE to Money Morning here.

>