Commodity trading giant Glencore will convert its shareholding in Russian aluminium company Rusal into shares of parent company EN+, as part of the group’s initial public offering.
Glencore owns 8.75 per cent of Rusal, controlled by Russian metals tycoon Oleg Deripaska. Glencore’s shareholding in EN+ will be calculated after the IPO, and based on EN+’s listing value and Rusal’s share price.
EN+ this month announced it would sell $1.5bn worth of shares as part of an IPO on the Moscow and London markets. CEFC China Energy will buy $500m of that as part of the listing.
Ivan Glasenberg, Glencore’s chief executive, will be entitled to a seat on the EN+ board, the company said in a statement.
Upon completion of the conversion, En+’s shareholding in Rusal would increase to 56.88 per cent from 48.13 per cent. En+’s primary business is selling electricity produced in its hydropower plants to aluminium smelters run by Rusal.
Maxim Sokov, EN+ chief executive, said:
Glencore’s proposed conversion of its stake in Rusal into En+ Group is an acknowledgement of our compelling investment case and strong business fundamentals. We are delighted at the prospect of gaining the long-term support of such a well-renowned partner in the global commodities sector. We look forward to working with Glencore and leveraging its unrivalled expertise to drive the ongoing growth of our business.