Shares in Oleg Deripaska's Rusal and En+ plunge on United States sanctions

Posted April 10, 2018

The caricature shows that the decline in the shares of the company UC Rusal. Rusal is controlled by Russian oligarch Oleg Deripaska, a close friend of President Vladimir Putin.

The US actions target Russian oligarchs whose companies have wide-ranging involvement in global capital markets.

The overall wealth of 50 richest Russians decreased by around $12 billion after the stock market decline due to the sanctions imposed by the US, as Russian Forbes reported.

Billions of pounds were wiped off the value of Russian companies yesterday as the business empire of one of its most prominent oligarchs teetered on the brink in the face of U.S. sanctions.

The sanctions are created to stop Mr Deripaska and associated companies from doing business in U.S. dollars and cut him off from any dealings with United States citizens.

Rusal is the biggest producer of aluminum outside of China.

"We have a whole list of possible measures that are being studied".

The company which supplies seven percent of the world's aluminum supply, is now at risk of defaulting on part of its debt, the AFP reported.

The sanctions were weighing on broader markets in Russian Federation.

"Rusal will probably have to be bailed out by Russian state banks", wrote analysts at TS Lombard. Shares in Russian steelmaker Evraz were the biggest fallers on the FTSE 100 in London, closing 14.4% lower.

Shares with Russian exposure listed elsewhere were also hit. Glencore is one of Rusal's biggest investors and buyers of its aluminium, and its chief executive, Ivan Glasenberg, sits on the Rusal board. "This is an outrageous business from the point of view of illegality, from the point of view of flouting all the norms, and of course careful analysis is needed here", said spokesman Dmitry Peskov.

Moscow said it was looking to support Russian companies hit by the sanctions. He said the new United States sanctions were unacceptable and illegitimate, and that the government would come up with plans to support the companies affected.

En+ Group and Rusal both released statements on Monday that said "it is highly likely" that the sanctions would "be materially adverse" to their businesses.