Russia’s En+ Group Invites Investors to $1 Billion Share Sale

Russian giant En+ has invited international banks to buy $1 billion of shares in the company that manages the aluminum and hydropower businesses of Russian businessmen Oleg Deripaska, sources told Reuters.

En+ had its Initial Public Offering (IPO) in November, but the inclusion of Deripaska on a U.S. list of Russian oligarchs published at the end of January is making some U.S. banks who worked with wary about participating this time, one of the sources said.

Compliance departments were concerned about any risk of reputational damage, although there was no suggestion advising on the share sale would attract U.S. fines. The source’s, institution has been asked to pitch for the new business, the report said.

The banking source said that “Banks don’t want headlines. Client selection is a massive issue.”

The U.S. Treasury has said the report, which also includes a list of senior political figures and the heads of state-run companies, was not a sanctions list.

A spokesman for En+ declined to comment on the planned share sale or whether U.S. banks might be reluctant to work with the company because of the U.S. list.

A spokeswoman for Deripaska said that “We do not comment on market rumors.”

Deripaska and family members own 76.6 % of En+, which has assets in metals and energy, including a 48 % controlling stake in Hong Kong-listed Russian aluminum producer Rusal (0486.HK).

When En+ listed in London, U.S. institutions Bank of America, Merrill Lynch, Citi and JP Morgan, along with Swiss bank Credit Suisse and Russian banks Sberbank and VTB Capital led the float.

The $1.5 billion IPO was the first major listing in London by a Russian company since 2014, when Russia’s annexation of the Crimea peninsula triggered Western sanctions against Moscow.

Since the IPO, Deripaska and another 95 Russians worth more than $1 billion were named in a report the U.S. Treasury Department was required by Congress to compile as part of the Countering America’s Adversaries Through Sanctions Act.