Aughinish crisis: Rusal hires adviser to sell Oleg Deripaska’s major stake

Maria Flannery

Reporter:

Maria Flannery

The parent company of Aughinish Alumina, UC Rusal, has engaged a major financial advisory group in a bid to free the firm from US sanctions

The parent company of Aughinish Alumina, UC Rusal, has engaged a major financial advisory group in a bid to free the firm from US sanctions

THE PARENT company of Aughinish Alumina, UC Rusal, has engaged a major financial advisory group in a bid to free the firm from US sanctions.

Independent directors at Rusal have hired Rothschild to advise on the sale of majority owner Oleg Deripaska’s stake, according to Reuters, signalling he may be willing to relinquish control to save the company.

It is the Russian oligarch’s control over the company which is causing the sanctions to continue to hang over the company, after the US announced a deal which would require a reduction in Deripaska’s stake to below 50 percent.

The April 6 sanctions, a diplomatic rebuke of Russia’s “malign activities around the globe”, saw the US Treasury Department targeting Russian businesspeople who were seen to have benefited from the Vladimir Putin regime.

Deripaska, who holds UC Rusal through En+, is known to have close ties to the Russian president and those around him.

The deadline for companies with holdings in Deripaska’s firms to divest their interest in them has been postponed until August 5, to allow time for a deal on the billionaire’s stake to be reached. The previous deadline would have run out this Wednesday, June 6.

En+ chairman, Greg Barker, said: “The onus is now on me and my fellow independent director to deliver the substantial changes and verifiable measures that will be required to successfully lift sanctions on the whole EN+ group.”

He added that the current steps being made show “real progress”.

The US Treasury deal would require Deripaska to reduce his ownership in En+ to below 50 percent from its current 66 percent.

Bloomberg is reporting that the oligarch may be able to keep his ownership in the mid-40 percent range to avoid the sanctions, despite the fact that Washington usually demands a much larger drop in shares.

The Russian businessman has stepped down as director of both En+ and UC Rusal in a bid to create some distance from his companies.

If the sanctions are dropped, it will be a major relief for the 450 direct employees of Aughinish Alumina, as well as another 500 working through indirect employment.

But if the sanctions remain in place past October, Rusal’s production could be cut by as much as 70 percent, the company has warned.

October 23 is the deadline for customers and suppliers with US links to cut ties with the Russian giant, or face secondary sanctions.

Such a production cut would be the worst case scenario, Rusal said, but if such a scenario were to materialise, it could mean plant closures and staff cuts, according to Russian newspaper, Kommersant.

Last week, US president Donald Trump imposed tariffs on steel and aluminium from Europe, Mexico and Canada, another move which is bound to have implications for Rusal.

The new tariffs include a 25 percent tax on steel and a 10 percent tax on aluminium. Trump’s move has faced significant backlash since the announcement last Thursday, amid the threat of a trade war.