Rusal shares fall 31 percent on U.S. sanctions

11 April, 2018, 17:04 | Author: Kathy Ellis
  • Rusal shares plunge sharply on US sanctions

Rusal of Oleg Deripaska states that its inclusion in the USA sanctions list could result in technical default on a number of its loan obligations, Interfax reports, citing the company's announcement.

Shares of United Company Rusal, one of the world's biggest aluminum producers, will be deleted from global equity and debt indexes while its metal will not be allowed on the London Metal Exchange (LME) and the CME Group.

Russia's En+ Group, which manages the assets of tycoon Oleg Deripaska, said on Monday that new USA sanctions were "highly likely" to materially affect its business and prospects in an adverse way.

On April 6, the United States announced imposing new sanctions against a number of Russian officials, businessmen and companies.

While Rusal's stock has been hammered in Hong Kong, the rally in aluminium prices has fueled gains in the shares of rivals worldwide.

This does warrant a little bit of panic buying by traders - the risk is large enough and real enough to buy on the back of insecurity of supply.

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Matt Chamberlain, the CEO of the London Metal Exchange (LME), said it would take steps to keep aluminium produced by Rusal after sanctions were imposed out of its warehouses.

New U.S. sanctions are causing fresh economic pain for Moscow, but have also ensnarled a handful of Western firms with deep roots in Russian Federation. Of course, the reasons for my inclusion in the U.S. sanctions list are unreasonable, ridiculous and absurd.

Russian prime minister Dmitry Medvedev said on Monday that he would instruct the government to develop initiatives to support companies affected by the sanctions and also consider retaliatory measures in response.

As Bloomberg points out, the move also raises questions for Glencore and its billionaire chief Ivan Glasenberg, the commodity giant who is one of Rusal's top shareholders, owning an 8.75 percent stake and also the biggest buyer of its metal, having bought $2.4 billion of metal from it a year ago.

The commodity giant is one of Rusal's top shareholders and the biggest buyer of its metal, while Mr Glasenberg sits on the board.

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