It has appeared that Russian aluminum giant UC Rusal, which is laden with debt, has passed provisional approval for an initial public offering (IPO) of its shares in Hong Kong. The deal expected to come through by the year end, can value the company at as much as $30 billion.

"Any offering would be conditioned on Rusal completing restructuring talks on its $7.4 billion in debt with foreign banks, among other factors. The debt agreement was to have been completed earlier this year, but the talks, involving over 70 creditors, have dragged out," said sources familiar with the matter. With the aim of attracting state-backed investors, like China's sovereign funds and Singapore's Temasek Holdings Pte. Ltd., as well as private buyers; the company would sell a 10% stake in the offering.

A sale like this will be another indication that financial markets have bettered notably worldwide, after the depths of the credit crisis, which took a toll on some of Russia's wealthiest investors.

Rusal accepted to pay $85.9 million with the aim of settling overdue debts to Russia's Alfa Bank, which had filed bankruptcy suits in Russia, against Rusal unit. This had angered the foreign lenders who have agreed not to pursue bankruptcy or seek repayment until the overall restructuring deal is completed. As per some creditors, the restructuring talks could continue through the end of the year. Since Rusal expected to lure a higher valuation, it selected Hong Kong for the primary listing.

A source familiar with the whole situation said, "Rusal has intensified contacts with the Hong Kong stock exchange since mid-summer. The exchange is expected to change listing rules for mining and resource companies in order to attract more of them later this year." Though Rusal had considered listing in London; the move became less attractive due to listing requirements in London, along with lawsuits pending against Oleg Deripaska, the tycoon who controls Rusal.

"Mr. Deripaska, who owns 56.8% of Rusal, would retain a controlling stake after the offering. The sale would provide the debt-burdened company with much-needed cash. The proposed restructuring requires substantial annual repayments of debt starting in 2010," continued the source.