Rusal shakes up board to slip out of US sanctions
Half of the board of Rusal resigned on Thursday as the Russian aluminium giant scrambled to avoid US sanctions targeting its founder Oleg Deripaska. The firm, a major supplier for industrial firms around the world, is intensifying its efforts to show Washington its determination to become independent from Deripaska, who de facto has controlled the firm but finds himself on a US blacklist. Even as the 50-year-old billionaire distances himself from the company, Rusal decided to purge itself of the directors Deripaska had appointed. Seven of the board's 14 directors have resigned, as well as chief executive Alexandra Bouriko. Deripaska did not resign his place on the board, but has previously indicated he doesn't plan to seek reappointment next month. In a statement, Rusal said the resignations were part of "the efforts that have been made by the management of the group to protect the interests of the company and its shareholders since the OFAC sanctions were imposed" last month. The US Treasury's Office of Foreign Assets Control announced fresh sanctions against Russia last month following the diplomatic crisis sparked by the poisoning of former spy Sergei Skripal. The sanctions hit oligarchs close to President Vladimir Putin, including Deripaska. The announcement prompted the shares of the firm responsible for seven percent of the world's aluminium production to tumble while the price of the metal soared. Manufacturers feared they would no longer be able to purchase supplies from the firm, potentially snarling production in many sectors of the US economy and elsewhere. Faced with the market turmoil, the US government then indicated Rusal could avoid being caught up in the sanctions by cutting ties with Deripaska, one of the so-called Specially Designated Nationals targeted by the sanctions. "In the case of the company ... the path for the United States to provide sanctions relief is through divestment and relinquishment of control of the company by any relevant SDN, including Mr Oleg Deripaska," said Rusal. The resignations announced Thursday are an extra step to comply with Washington. - 'Materially adverse' - The threat of Rusal falling under US sanctions sent aluminium prices soaring to a seven-year high $2,718 per tonne in mid-April. They have since slid, falling below $2,200 on Thursday despite traders remaining concerned. "Does this bring Deripaska's resignation closer? If so, it is bearish, but I guess as long as he remains there the threat of a more permanent curtailment of aluminium supply will find eager buyers" speculating on rising prices, said Matt France, an analyst at the Marex Spectron commodities brokerage. Rusal itself also noted that the sanctions may still harm its operations. The firm "remains of the same view that the impact may be materially adverse to the business and prospects of the group", Rusal said in its statement. Russian Finance Minister Anton Siluanov was more optimistic about the announcements on Thursday. "It is a good thing, it means the sanctions will be lifted," he said. Siluanov said the state would provide the firm with loans at market rates if banks refuse lend to Rusal for fear of falling foul of US sanctions. Rusal employs tens of thousands of people, and certain of its facilities are the only employer in their localities.
