February 14, 2017 / 11:28 AM / 5 months ago

Russian tycoon Prokhorov cuts Rusal stake in $240 million sale

Russian billionaire Mikhail Prokhorov speaks during a news conference in Moscow June 13, 2013.Sergei Karpukhin

MOSCOW (Reuters) - Russian tycoon Mikhail Prokhorov has offloaded some of his Rusal stake in the open market after talks to sell his holding in the Russian aluminum giant to fellow businessman Viktor Vekselberg stalled.

Prokhorov's Onexim Group, which manages his assets, sold 3.3 percent of Rusal via an accelerated book build for $240 million on Monday, Renaissance Capital told Reuters on Tuesday.

The deal came a week after sources said that Prokhorov's discussions to sell a 12-percent stake in the aluminum company to fellow Rusal shareholder Vekselberg, which had been going on since last year, had halted.

Prokhorov, whose interests include the Brooklyn Nets basketball team in the United States, has said that he is not selling all his Russian assets.

Vedomosti newspaper reported in July that the tycoon was looking for buyers, several months after Russian law enforcement officials searched his offices.

Onexim, which owned 17 percent of Rusal before Monday's sale, had initially planned to raise $200 million by selling 2.5 percent of the Russian company, banking sources have said.

But demand for the shares allowed Onexim to sell a slightly larger portion of its holding, Dmitry Brodsky, head of Russia & CIS Equity Capital Markets at Renaissance Capital, told Reuters.

Onexim and Rusal declined to comment, but Renaissance Capital, which was one of the deal's organizers, said it valued a Hong-Kong listed Rusal share at HK$3.70.

A significant part of demand for the deal has come from Russian investors, with European and British interest but "insignificant" Chinese buying, Brodsky said.

Rusal shares fell 3.4 percent to HK$3.93 in Hong Kong on Tuesday, against a broadly flat benchmark index, although its market value is still up 20 percent so far this year, supported by growth in global aluminum prices.

Russian tycoon Oleg Deripaska's En+ Group owns 48.1 percent of Rusal, which competes with China's Hongqiao for the rank of the world's biggest aluminum producer.

Another 15.8 percent is owned by Vekselberg and Leonard Blavatnik, Glencore holds 8.75 percent and Onexim's sale increases Rusal's official free-float to 13.3 percent.

Additional reporting by Kira Zavyalova, Katya Golubkova and Polina Devitt; Writing by Polina Devitt; Editing by Larry King and Alexander Smith

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