The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Opinion

Russian equity: Rusal botches its IPO

The Russian aluminium company’s stock market debut seemed ill-fated from the start.

Dogged by controversy ever since Rusal announced its intention to list on the Hong Kong Stock Exchange, its IPO on January 27 floundered after launch. Its shares plunged more than 10% after the first day of trading as investors gave a thumbs down to the Russian aluminium producer.

This was an IPO that was a disaster in the making. Two previous attempts to list were abandoned. The latest attempt was originally slated to launch before Christmas after Rusal signed off on a restructuring of its $14.9 billion of debt at the end of November. But the date was pushed back because Rusal had failed to fulfil several exchange conditions, including its profit requirement. The transaction was approved only after some hastily arranged compromises.

One of the issues that the HKSE was fretting about was a $4.5 billion loan from VEB, the Russian state bank, which is due in October. To appease the listing committee’s concerns Sberbank agreed to take on the loan and extend its maturity until 2013.

The IPO was then allowed to go through only if retail investors were shut out, as the company was deemed too risky. That move backfired: the shares, which were valued at a 15% premium to China’s Chalco and a 50% premium to the US’s Alcoa, tumbled within minutes of trading.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree