Temasek Holdings not interested in RUSAL's IPO

MARKETS & INVESTING | Temasek Holdings not interested in RUSAL's IPO

Temasek Holdings rejects the $2.6 billion Hong Kong IPO of the world's biggest aluminum maker.

Despite being pursued by UC RUSAL, the sovereign fund chose not to get involved and instead is investing in the Hong Kong IPO of Canada-listed SouthGobi Energy worth $400 million. A Reuters report cited RUSAL's debts, approximately $14.9 billion, and legal challenges being faced by its owner as factors for the rejection. The IPO, however, already has sufficient orders to guarantee success. The report added RUSAL's flotation was fully subscribed on day 6 of bookbuilding based on the HK$10.8 mid-point of the price range, and the IPO had been fully covered on the third day based at the bottom of the price range.

China Investment Corp (CIC) joined Temasek in turning its back on the IPO as it also invests in SouthGobi and has purchased a 17.2 percent stake in Teck Resources for $1.5 billion and 14.5 percent in Noble Group for $850 million.