Secrets of SUAL

As it turned out, the company paid dividends to shareholders

The owner of the assets of SUAL Holding - SUAL International - unlike the Russian holding company, regularly paid dividends to shareholders. Interfax reports this with reference to the company’s report according to IFRS standards for the first half of last year, which was being prepared for the planned IPO. According to this document, at the end of the first half of the year, the company allocated $217.5 million to pay shareholders, for 2005 - $209.3 million, for 2004 - 161.9 million. Net profit of SUAL International according to IFRS in the first half of 2006 amounted to $316.8 million, revenue - $1.612 billion. The company has never officially disclosed its figures, and now its representatives have refused to comment on the Interfax information, saying that the document was not published.

Before the announcement of the merger of SUAL, RUSAL and the aluminum business of the Swiss Glencore, the former planned to hold an IPO. Moreover, the company announced its intention to place shares on international exchanges almost in 2000. Plans were made clearer in 2004, when she announced that she was preparing the relevant documents. At the same time, the former head of the British-Australian BHP-Billiton, Brian Gilbertson (one of the organizers and ideologists of the IPO of the British Billiton Plc and its merger with the Australian BHP, which led to the creation of one of the leaders in the mining industry), was invited to the position of president of SUAL. He has already conducted several successful placements of shares of large mining companies. And it was obvious that Mr. Gilbertson was brought into SUAL as a major specialist in bringing shares to the market.

However, SUAL postponed the decision on the IPO. As they said in the market, the reason was that one of the group’s most ambitious projects, Komi-Aluminium , was in limbo. The project envisaged the creation of production of 1.5 million tons of alumina and about half a million tons of primary aluminum annually and, according to initial calculations, required more than $2 billion in investments. Foreign partners were in no hurry to join Komi-Aluminium, since in the long term it was not provided with electricity at negotiated prices, and it was difficult for SUAL to implement such a large-scale project alone. Finally, in the spring of 2005, a partner was found for the project. It became RUSAL, owned by Oleg Deripaska, the main competitor of SUAL in Russia. Sources on the market say that it was with negotiations on the Komi-Aluminium project that the cooperation of irreconcilable competitors began, which ultimately led to the decision to unite.

This decision put an end to SUAL's plans to hold an IPO, although during the preliminary negotiations on the deal the company insisted on its own, trying, in particular, to get a valuation on the market. Apparently, one of the main opponents of the IPO was the owner of RUSAL: by merging with a public company, which SUAL would become as a result of the placement, Mr. Deripaska would also have to largely open his own company or buy back shares from the market, which, of course, would delay the deal.

As a result, SUAL refused the placement, and one of the terms of the deal was an IPO of the combined company a year and a half after its formation. But perhaps this deadline will be postponed. After all, the main driver of the IPO of the merged company was considered to be the current president of SUAL, Brian Gilbertson, who was supposed to take the post of chairman of the board of directors in the new structure. Meanwhile, judging by the latest reports in international media, he will not remain working at Russian Aluminum. According to sources, Mr. Gilbertson is not satisfied with the amount of remuneration offered to him by the new management of the company. It is possible that Mr. Gilbertson has other motives. But participants in the unification process prefer not to wash dirty linen in public.

However, as Interfax reports, SUAL employees who will not be hired by the united company Russian Aluminum will receive severance pay in the amount of an annual salary. The corresponding letter was signed by President Brian Gilbertson and RUSAL CEO Alexander Bulygin. Although, as representatives of both companies say, the staff of the new structure has not yet been determined.

Let us recall that the deal to merge RUSAL, SUAL and the aluminum assets of the Swiss Glencore was officially announced in October last year. According to the decision of its participants, in the merged company RUSAL will own 66% of the authorized capital, SUAL - 22%, and Glencore - 12%. The board of directors will include 12 people: six representatives of RUSAL, two from SUAL, one from Glencore and three independent directors. It was previously assumed that Mr. Gilbertson could become one of the independent directors. But, apparently, this place will go to someone else.

According to the plan, the deal should be closed by the end of March. All approvals from government agencies of interested countries have already been received. And it is possible that it will end earlier.

Anna LANDER