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SUAL, RusAl Could Join Forces
Russia's second-largest aluminum producer, SUAL, hopes to find a strategic investor by the summer of 2006 and does not rule out a merger with the country's top producer of the metal, RusAl, said SUAL co-owner Viktor Vekselberg.
"We are in the process seeking a strategic partner, and, I believe, we will finish it by the summer," Vekselberg, who is also SUAL's board chairman, told reporters Wednesday.
He said SUAL expected a leading metals firm to become its potential investor, but declined to elaborate.
When asked about a possible merger with RusAl, the world's third- largest aluminum producer, Vekselberg said that SUAL was considering such an opportunity.
"If it brings us an advantage from the business point of view -- why not?"
"We consider mergers and acquisitions an important source of further growth and development for RusAl, and are studying various options," a RusAl spokeswoman said Wednesday, but did not elaborate further.
In June of last year, RusAl chief executive Alexander Bulygin said the company might consider merging with SUAL, but he denied any merger talks had taken place.
SUAL and RusAl are equal partners in a $1.2 billion project in Russia's Far North, Interfax reported.
Vekselberg also said on Wednesday that SUAL had terminated an agreement with British investment fund Fleming Family and Partners to form an international mining and smelting company.
He said the fund had not fulfilled its commitments "due to reasons that do not depend on us or on them."
Fleming Family and Partners officials were not immediately available for comment.
Kommersant quoted Vekselberg as saying SUAL had completed a buyback of 5 percent of shares of SUAL International from Fleming, thus unwinding the partnership. Fleming has been in talks to raise its stake in SUAL International to 23 percent.
Aton Brokerage said the reported breakup of the SUAL-Fleming partnership, struck in 2003, could open the door to an initial public offering of SUAL stock.
"The news could potentially be the catalyst needed to bring SUAL to the public markets, as now there is no nagging background question as to structure and pre-IPO shareholder composition," Aton said in its daily note.
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