Rusal Loses $1.5bn in Capitalization in One Month Due to U.S. Sanctions

The world’s second-largest aluminum producer, Russian giant Rusal, and its owner Oleg Deripaska lost about 96 billion rubles ($1.5 billion) in capitalization in the first month after the U.S. Treasury imposed the latest wave of sanctions against Russian businessmen and companies, reports.

At the close of trading on April 5, the company’s securities were worth 34.41 rubles. The total capitalization of the company for the month decreased from 522.8 billion rubles ($8.27 billion) to 426.8 billion ($6.75 billion), the report said. At the historical low of April 9, Rusal’s capitalization stood at 228.5 billion rubles ($3.61 billion (at a price of 15.04 rubles).

The U.S. Treasury extended sanctions against the Russian Federation on April 6. 38 Russian businessmen, officials, and companies got under the influence of economic restrictions. In the list, in particular, fell co-owner Rusal Oleg Deripaska. In the ensuing two trading days, he lost more than $2 billion.

On April 16, in connection with the sanctions, Rusal shares on the Hong Kong Stock Exchange fell to historic lows. Later it became known that against the background of U.S. sanctions, world prices for aluminum rose to a maximum since the fall of 2011.

On Monday, it was reported that the U.S. Treasury may disapprove the plan to lift the sanctions from Rusal, which is represented by the controlling En+ Group. The plan to make the company unaffected by the sanctions lies in reducing Oleg Deripaska’s share to less than 50% and his leaving the board of directors so that non-executive directors become the board majority. One of the reasons the U.S. Treasury may refuse is the fact that 11% of En+ belongs to Deripaska’s immediate family, the report said.

As of December 31, 2017, Oleg Deripaska owned a 68.5% stake in En+. According to the Group’s annual report, 66.08% belonged to the oligarch through a company affiliated with the Basic Element Group and B-Finance. Another 2.4% belongs to Eastern Carriers Trading Element, also run by Deripaska, according to the offering prospectus of En+ in London in November 2017.