Russia, still a mystery

United Company Rusal, the world’s largest alumina, aluminum & alumina alloy company, plans to list in Hong Kong before year end.

Accounting for 12.5% of the entire global output of aluminum and 16% of alumina production, the business list some interesting figures.

1H 2008, revenue of USD8.4Bn and net profit of USD1.4Bn
1H 2009, revenue of USD3.8Bn and net profit of USD784Mn
Sharply cut cost this year, reducing production cost of 1 ton of aluminum by 25%
Debt of USD16Bn, with USD7.4Bn under a re-structuring deal.

Targets to raise USD2.5Bn from Asian investors through the Hong Kong IPO, mainly to repay creditors. Hong Kong regulators are expected to approve the listing.

The USD7.4Bn debt restructure is expected to be sealed prior to the Hong Kong listing. The deal extends over 7 years, with the first four including a “pay as you can” clause.

While we are seeing more on how business is conducted behind the bamboo curtain through Chinese IPOs, UC Ruscal’s successful listing would perhaps enable us to see what transpires behind the iron curtain.