Russia’s Deripaska eyes power unit listing

Debt-laden Russian tycoon Oleg Deripaska is planning to list a power firm in Hong Kong, banking sources said, weeks after his aluminum company RUSAL’s IPO left investors nursing hefty losses. January’s initial public offering (IPO) in Hong Kong of around a tenth of RUSAL -- the world’s top aluminum firm in which Deripaska holds a major stake -- raised $2.2 billion to pay down debt. But its shares then dropped around 22 percent from the IPO price because of global market jitters, renewed investor aversion to risky assets.

RUSAL was the first non-Asian company to float in Hong Kong, and now Deripaska, Russia’s most indebted oligarch, is looking to list En+ Power -- currently called EuroSibEnergo. One Moscow-based fund manager said a second attempt by Deripaska at a Hong Kong listing after the performance of the first would be “absurd”, adding, “The optimism once held by Russian companies - fueled by investment banks -- that they can list in Hong Kong and get a premium has been rendered moot. The RUSAL price and relative lack of liquidity should have woken the market up to that fact.”
Separately, Viktor Vekselberg, another key RUSAL shareholder, has indicated he would target Hong Kong for an IPO of his Kamchatka Gold miner later this year. “The project is definitely a very logistical development with Chinese participation,,” he said.

Recent events have made investors more skeptical. En+ Power has debts of around $1.5 billion maturing in 2015. It is the power division of Deripaska’s energy holding company En+ Group, which restructured around $1 billion of debt this year and will have to pay back the borrowings by the end of 2013. An IPO of the power division would echo the path to market taken by RUSAL, its gest customer, which restructured a $16.8 billion debt pile in late 2009.