Libya's sovereign fund has bought the most shares in Russian aluminum giant RusAl's initial public offering in Hong Kong, along with Russia's national development bank Vnesheconombank (VEB), a business daily reported on Monday.
Libyan Investment Authority bought 1.43% of RusAl stock for $300 million while VEB paid $663 million for a 3.15% stake in RusAl. Overall, the world's largest aluminum producer sold 10.6% of its shares in the IPO and raised $2.24 billion, Vedomosti reported.
RusAl's IPO was the first share offering by a Russian company in Asia.
Libyan Investment Authority, which manages assets worth more than $65 billion, will become RusAl's second largest minority shareholder after VEB. A source close to RusAl told Vedomosti that Libya's sovereign fund made the decision to buy a RusAl stake with the personal approval of Libyan leader Muammar Gaddafi and his family, while the aluminum giant's officials who held negotiations with the fund included RusAl CEO and owner Oleg Deripaska.
RusAl, which accounts for approximately 11% and 13% of global production of aluminum and alumina, respectively, piled up large debts before the 2008 global financial crisis, obtaining cheap loans internationally and domestically, and is now struggling to repay its liabilities.
RusAl sold 1.61 billion new shares at HK $10.8 ($1.39) each compared with the IPO's indicated price range of HK $9.1-12.5 ($1.17-1.61). The offer price valued the company at $21.3 billion. By comparison, U.S.-based Alcoa traded at $13.06 billion and the aluminum corporation of China (Chalco) at $23.36 billion on Friday, Vedomosti said.
Despite the high offering price of new shares, RusAl's bid book was heavily oversubscribed, allowing the aluminum giant to attract more than 300 new shareholders, including cornerstone investors such as Nathaniel Rothschild's NR Investments, U.S. hedge fund Paulson & Co. and Malaysian-Chinese billionaire Robert Kuok Hock Nien, the paper said.
Trading in RusAl shares listed on the Hong Kong Stock Exchange is scheduled to begin on January 27.
MOSCOW, January 25 (RIA Novosti)
