(Recasts with Guinean official, adds political background)
LONDON, Jan 26 (Reuters) - The outgoing Guinean government is seeking part of the proceeds from the flotation of Russia’s UC Rusal toward covering damages it says it is owed by the world’s biggest aluminium producer, an official said.
Jean Alfred Mathos, Guinea’s lawyer in charge of defending state interests, confirmed a Financial Times report earlier on Tuesday that Guinea has written to the Hong Kong stock exchange to say that its claims were “materially important” to any potential investors in the $2.2 billion offering.
“The letter has indeed been sent,” Mathos told Reuters.
“This is a stock market operation and everything needs to be clear. We are demanding the payment of a bit more than $900 million in damages and interest and $500 million in capitalisation,” Mathos added.
The FT reported in its Tuesday edition that Guinea was asking for $860 million in damages.
A Guinean court ruled in September that the sale of the Friguia refinery to Rusal in 2006 was illegal and that the firm was charged significantly less than the plant’s true value.
Guinea has subsequently been gripped by political turmoil as opposition to the country’s military rulers boiled over into violence. The nation is now awaiting the nomination of a government to lead a transition to elections and civilian rule.
Guinea’s outgoing minister of mines, Mahmoud Thiam, told the FT a lack of settlement could affect the value of Rusal’s stock.
“Subscribers should know that, barring a settlement with Guinea, the value of the Rusal stock they acquire might very well be overstated,” he said.
Thiam remains the minister of mines pending the appointment of a new government in Guinea.
Jean-Marie Dore, who was nominated prime minister in a deal struck with the junta earlier this month, officially began his job on Tuesday but is yet to name his government.
The Financial Times cited Rusal as saying it had nothing new to add on the Guinea situation and that it had disclosed all relevant details.
“The company does not believe that any resulting liabilities will materially affect the group’s financial position or its operations as a whole,” a spokesperson was quoted as saying.
RUSAL, in its IPO prospectus, said it believes it could replace any potential loss of alumina production from Guinea with its own production from other facilities or through market purchases.
It said in the prospectus that a hearing into the case set for Dec. 15 did not take place “for technical reasons.”
For Q+A on the risks facing RUSAL in Guinea, click: [ID:nLDE6050ME] (Reporting by Victoria Bryan; additional reporting by Saliou Samb; Writing by David Lewis; Editing by Alden Bentley)