https://www.engineeringnews.co.za

US gives Rusal investors more time but keeps Deripaska on hook

1st August 2018

By: Bloomberg

  

Font size: - +

MOSCOW –  The US Treasury Department gave investors more time to sell their shares and debt in En+ Group and affiliate, United Co. Rusal, but stopped short of removing the aluminum and power companies from a sanctions list targeting Russian billionaire Oleg Deripaska.

The deadline for investors to sell their shares and debt in En+ and Rusal was extended to October 23 from August 5, the Treasury’s Office of Foreign Assets Control, or OFAC, said in a statement on Tuesday. The decision suggests further negotiations are needed before making progress on lifting sanctions, after OFAC shunned a request by En+ and its lobbyist Mercury LLC to temporarily withdraw the company and Rusal from the list.

Deripaska agreed in April to cut his stake in En+ to less than 50% from 66% currently and to appoint a majority of independent directors to the company’s board as part of a plan to persuade the US to lift sanctions. Three months after announcing the plan, however, the company hasn’t publicly identified any potential independent directors, nor any buyer for Deripaska’s shares.

"This is mildly positive move as it indicates that the US Treasury is ready to talk to Deripaska in general, so there are chances to agree on the terms later," said Kirill Chuyko, head of research at BCS Global Markets in Moscow.

On the other hand, the latest Treasury decision means the uncertainty on the aluminum market will remain until at least the end of October, and Rusal will face issues with selling semi-finished metal. It is more complicated and expensive than standard aluminum ingots, needs more time to be produced and Rusal clients have no guarantees it will be able to deliver pre-paid semi-finished metal after October.

The U.S. penalties against Rusal, the world’s largest producer outside China, initially disrupted the global supply chain for the metal and sent prices soaring. The Treasury earlier set the deadline for winding down operations with the company at October 23, which is now the deadline for selling out too.

According to Mercury’s filing to the US Justice Department, which is dated July 12, En+ has identified potential new directors. It also suggests that Deripaska and his family members are planning to transfer shares to a trust to reduce his stake to less than 50%.

Valentin Yumashev, President Vladimir Putin’s aide, and his daughter Polina, whom Deripaska married in 2001, were also disclosed as shareholders in En+ by Jersey Financial Services Commission in February. Yumashev owned 10-million shares, or about 1.8% of En+, while Polina held about 33-million shares, or about 6%.

Finally, as part of the plan, a loan from VTB Group would be “discharged,” according to Mercury’s filing. VTB also has a 9.6% equity stake in En+. The company’s sanctions relief plan envisages those shares being voted by an independent person, according to the filing.

Rusal shares declined as much as 2.6% in Hong Kong on Wednesday, while the price of aluminum dropped 0.5% on the London Metal Exchange as of 8:46 a.m. U.K. time.

En+’s press service declined to comment.

Edited by Bloomberg

Comments

Showroom

Environmental Assurance (Pty) Ltd.
Environmental Assurance (Pty) Ltd.

ENVASS is a customer and solutions-driven environmental consultancy with established divisions, serviced by highly qualified and experienced...

VISIT SHOWROOM 
Werner South Africa Pumps & Equipment (PTY) LTD
Werner South Africa Pumps & Equipment (PTY) LTD

For over 30 years, Werner South Africa Pumps & Equipment (PTY) LTD has been designing, manufacturing, supplying and maintaining specialist...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.065 0.117s - 156pq - 2rq
Subscribe Now