United Company (UC) Rusal, the world's second-largest aluminium company by primary production output, has announced the issuance of non-documentary interest-bearing non-convertible exchange-traded bonds under the BO-001P-14 series. With over 11 million bond pieces, each has a nominal value of RMB 1,000. The firm has set a maturity date of 728 days, which will begin from the start of the bond placements. Is this a strategic financial decision?
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The firm has issued nearly 11 million bonds, a strategic financial move for raising capital via an open subscription made under the Moscow Exchange. These bonds of the firm have been included under the "Second level" section of Moscow's Exchange list of securities, which is also subject to trading.
By listing on the Moscow Exchange, the company is assured of higher financial support alongside greater market presence. Additionally, this also creates an investment opportunity for the firm's stakeholders.
On the same day, the firm had also declared the expiration deadline for its exchange-traded bonds to the potential buyers. This has been mentioned by the firm within its preliminary bond agreement issued to the investor (the potential buyers), including the date of the start of the placement of the Exchange-traded bond.
These non-documentary interest-bearing non-convertible exchange-traded bonds have been issued by the firm for purchase by its potential buyers in Chinese yuan. Moreover, the interest rate for the first coupon payment is set at 12 per cent per annum and shall be further implemented within the subsequent coupon periods as well. With this strategic move, the firm can attract investments that are particularly keen towards investing in the yuan-dominated securities.
In order to underwrite the issuance of the non-documentary interest-bearing non, the firm has appointed Gazprombank as the underwriter. This shall aid the organisation to create an impact on delivering the quotations and value of its securities, further strengthening its financial position by offering the stakeholders better investment opportunities.
Gazprombank, also known as GPB, is a privately owned bank located in Russia. This organisation has been operating since 2014 and offers a full range of services to both legal entities and individuals. Based on the underwriting to be issued by Gazprombank, all the bidders of PJSC Moscow Exchange are required to send applications in order to undertake the purchase of the exchange-traded bonds after the start of the placement.
Issuing of the Exchange-traded bonds to the investors will significantly create a direct impact on the company's current financial situation and operation. Announcement of the expiration deadline within the preliminary agreement also concludes the purchase and sale of all the bonds, posing a direct impact on the overall value or quotations of its securities.
Now the question arises — what makes Rusal sell its bond to raise capital? Let's have a closer look at some of its financial structure to have a clearer viewpoint.
D-o-D stock price analysis (From May 12 to 15, 2025)
As of May 15, 2025, the share price of the firm is recorded at RUB 33.475 (USD 0.4151), showing a downward trend from the opening price which was at RUB 33.580 (USD 0.4164) the last price for the previous day. On the same day, the stock price is estimated to be at RUB 33.920 (USD 0.4216), and the lowest will be RUB 33.420 (USD 0.4144).
When the market opened on May 12, 2025, the stock price opened at RUB 34.185 (USD 0.4239), showing an upward trend which changed on May 13, 2025, when the price fell to RUB 33.920 (USD 0.4206).
W-o-W stock price analysis (From April 06 to May 11, 2025)
Looking into April 6, 2025, the firm's stock price had shown a downward trend where each stock was priced at RUB 33.765 (USD 0.4187). The following week, the stock price further fell to RUB 33.280 (USD 0.4127) but rose in the subsequent week, where the price touched RUB 35.140 (USD 0.4357).
Nonetheless, the fluctuation of the stock price prevailed in the following week as well, when the price again fell to RUB 32.520 (USD 0.4032). However, the price again made a breakthrough with the start of May, where the stock price W-o-W showed an increase.
M-o-M stock price analysis (From Jan to May)
Out of the five months in 2025, the firm had witnessed an upward trend of its stock price only for the month of February, where the stock price rose to RUB 39.565 (USD 0.4906). This year, the opening stock price was RUB 37.020 (USD 0.4590), which fell in January at RUB 35.280 (USD 0.4375). During February and March, the stock price was moving in a satisfactory direction but faced a bearish market since April, when the price fell directly to RUB 33.890 (USD 0.4202).
Financial performance in 2024
As per the financial update released by the firm on March 14, 2025, it has experienced a leap of 184.75 per cent, where the Y-o-Y growth of the company had been from USD 282 million to USD 803 million.
The major cause behind such a leap is deemed by the surge price of aluminium within the global market. In the same year, the gross profit of the firm stood at USD 2,821 million, indicating a positive upward of 59.56 per cent from the previous where the same was USD 1,768 million.
Rusal reported a significant improvement in its financial performance, with adjusted EBITDA rising by 1.9 times to USD 1.494 billion, compared to the previous year. This growth led to an increase in the adjusted EBITDA margin to 12.4 per cent, up from 6.4 per cent in 2023.
Despite a slight revenue decline of 1.1 per cent to USD 12.08 billion, the company's adjusted net profit surged 13.5 times to USD 983 million, highlighting enhanced operational efficiency and profitability.
With such rising financial performance in 2024 and slow but effective stock price movement in the positive direction, why is Rusal issuing these bonds for capital raising?
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