RusAl's proposed IPO is causing jitters on Wall Street where Goldman Sachs quit its position as listing adviser and bankers are worrying about dealing with debts and Oleg Deripaska.
The company, which is the world's largest aluminium producer, is hoping for a December listing in Hong Kong and Paris but is in a race against time to sort out its burgeoning loan portfolio by the listing deadline of November 19.
Troubled tycoon Deripaska, the majority shareholder in the firm, is reportedly on the verge of restructuring $7.3 billion of the firm's debts with foreign creditors, but would still need to secure the approval of more than 70 banks for the offering to take place.
"We believe RusAl may be successful in restructuring its debt ahead of its IPO, which is planned for December this year, but faces significant hurdles," said CitiBank in a research report.
A deal with fellow oligarch Mikhail Prokhorov was due to go through at the weekend a source close to RIA Novosti said, which would see Russia's richest man take a 19.16 per cent stake in the company.
Conclusion of the deal has not been confirmed but it is thought Prokhorov will convert $1.8 billion in debt to gain the extra 5.16 per cent share.
Analysts say that the IPO will be good for Russia's metals and mining sector if it goes ahead as well as for Deripaska, who is reportedly under pressure from other shareholders, including Prokhorov, to raise cash for the debt-laden firm.
"The deal could also increase the interest in the Norilsk Nickel stock, given that UC Rusal owns a 25 per cent stake in Norilsk Nickel; hence this stake has substantial value," said UBS in a note.
American bankers, however, also have concerns about Deripaska and the law suit filed against him in London by Michael Cherney, who claims he is owed a stake in the firm.
Reports in the Wall Street Journal quote a person familiar with the situation saying that investors "are just not comfortable sponsoring Deripaska."
The metals magnate recently visited the US, meeting with top bankers but his visa status in the US remains in doubt, with some reports claiming he is banned from entering and doesn't hold a visa.