Libya lends support to RUSAL share float

Tue Jan 26, 2010 6:05pm GMT

By Robin Paxton

MOSCOW (Reuters) - Libya is among the main backers of Russian aluminium giant UC RUSAL's $2.2 billion stock float in Hong Kong , sources close to the listing said on Tuesday, as Tripoli looks further afield to invest its oil wealth.

Libya's $65 billion sovereign wealth fund has bought a stake of around 1 percent in UC RUSAL, the sources said.

The two sides had agreed to explore construction of an energy and aluminium complex in Libya before the financial crisis hit in late 2008.

While Libya's support for an IPO that was also heavily backed by the Russian state hints at growing ties between the two countries, the sources said the investment was in keeping with Libya's recent advances abroad into European markets.

"It's a big IPO with a big quasi-political component," one source close to the offering said, on condition of anonymity.

UC RUSAL shares are due to start trading on Wednesday after the world's largest aluminium producer secured enough support for a listing crucial to its repayment of debts approaching $15 billion.

The IPO was backed by Russian state bank VEB, which is buying a stake of over 3 percent, and cornerstone investors that include Nathaniel Rothschild's company, U.S. hedge fund Paulson & Co and Malaysian-Chinese businessman Robert Kuok Hock Nien.

One source close to the offering said the Libyan Investment Authority invested $200 million in the UC RUSAL IPO, which would give it a stake of almost 1 percent. Business daily Vedomosti said the amount was $300 million, giving it a 1.4 percent share.   Continued...

<p>A worker walks between stacks of high purity aluminium ingots at the RUSAL aluminium smelter in the Siberian city of Krasnoyarsk April 4, 2007. REUTERS/Ilya Naymushin</p>
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