VTB in Talks with Chinese Companies over Sale of En+ Shares: Report

Two state-run Chinese industrial groups are negotiating with Russian banking conglomerate VTB about a possible purchase of En+ Group shares from the bank, The Financial Times writes citing sources familiar with the negotiations. 

VTB owns more than 20% in En+ Group, an energy company formerly owned by billionaire oligarch Oleg Deripaska, who was forced to cede control of the firm this year in order to get sanctions relief from the U.S. Treasury Department.

“They don’t discuss the exact details right now, but the interest in them [deals] is serious on both sides,” said one of FT’s sources.

The person close to En+ said it is unlikely that the U.S. Treasury’s OFAC (Office of Control of Foreign Assets) will be against the deal, as it does not involve individuals and companies that are under sanctions.

The interest of Chinese companies in En+ Group is due to environmental problems in the country, which increases the state’s interest in low-carbon energy. 

“Chinese companies want to switch to renewable energy and En+ matches this profile,” FT writes.

In June, VTB head Andrei Kostin told reporters that the bank is not currently discussing the sale of its stake in En+ Group.

En+ Group is an integrated producer of aluminum and electricity. It combines power plants with a capacity of 19.7 GW and aluminum plants with a capacity of 3.9 million tons per year (through a controlling stake in Rusal), which are the main consumer of the energy produced. The beneficiary of the holding is businessman Oleg Deripaska, who is under U.S. sanctions since April 2018.