Global Arab Network | Libya could buy 10% of RusAl, the world’s largest aluminium producer

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Libya could buy 10% of RusAl, the world’s largest aluminium producer

Global Arab Network - - Hannan Taha

Monday, 21 September 2009 10:07

United Company RusAl, the world’s largest aluminium producer, is racing to complete debt restructuring plans after talks with the Libyan Investment Authority (LIA) , Britain's The Times daily reported on Monday.

RUSAL, controlled by Russian magnate Oleg Deripaska, said on Friday it had secured another extension on restructuring billions of dollars of debts to foreign and domestic banks. [ID:nLI262829]

The Times said there had been "active" discussions over a possible stake sell to Libyan Investment Authority.

It is not known whether Mr Deripaska was prepared to reduce his own stake as part of a refinancing deal with Libya.

"However, RUSAL became frustrated at the lack of progress and the slow speed at which officials in Tripoli operated and has walked away," the paper said, without revealng its sources. It added that the LIA was unavailable for comment.

A deal with Libya would have had a number of advantages apart from a much-needed injection of capital. Any deal with Tripoli would have been faster than pursuing the protracted process of preparing for a partial float on a big stock market. It could also have prepared the way for RusAl to negotiate other contracts in Libya and may have offered the Russians the opportunity of building an aluminium smelter in the North African country, exploiting its plentiful energy supply.

A spokesman told The Times: “RusAl has been in contact with a number of capital providers and is considering a variety of options for capital-raising, including a possible IPO, and we are not commenting on any individual negotiations.”

On top of the money that it owes foreign banks, RusAl owes about $4.5 billion to the Kremlin-controlled VEB bank and $2.1 billion to other Russian banks. Its deadline for debt restructuring had originally been September 18, a date agreed at the end of July when Mr Deripaska and the coordinating committee representing RusAl’s banks presented the restructuring proposal to 70 international lenders.

"We do not comment on the details (talks with LIA) of our negotiations," RUSAL spokeswoman Vera Kurochkina told Reuters.

RUSAL is in talks to restructure around $7.4 billion of debts to foreign banks. It also owes some $4.5 billion to Russia's state-run VEB bank and $2.1 billion to other local banks.

Deripaska said in February that RUSAL -- which has been hit by falling global demand for metals -- has potential investors which are interested in acquiring a stake, but that talks had been postponed until debt restructuring is complete. At the time, he hoped that a restructuring deal would be signed in March. (Reuters)

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