Russian Aluminum Opens Itself to Banks
// And will tell everyone else who owns it soon
Corporate Management
Rusal, considered one of the most secretive of the Russian metal companies, will disclose the names of its owners within the next six months, and convert to consolidated accounting under international standards and will introduce three independent representatives on the board of directors within a year and a half. It's all the price of an agreement with the International Financial Corp. and European Bank for Reconstruction and Development to allot $150 million to Komi Aluminum, a joint enterprise of Rusal and SUAL. Kommersant has obtained information that, in the documents presented by Rusal, only one owner is named – Oleg Deripaska.
IFC representative Christopher Goss told Kommersant that that the boards of directors of the banks made the decision to provide the $150-million credit to the aluminum company on January 10. The details will be worked out at a multilateral meeting between Rusal, SUAL, which have parity shares in the aluminum plant, and the two banks. It is known only that the banks will both provide $75 million for ten years. Those funds will be used to expand bauxite production at the Sredne-Timanskoe deposit from 1.6 million metric tons to 6 million tons by 2008 and to prepare for the construction of an alumina plant with a capacity of 1.4 million tons.
The banks first expressed their willingness to credit the project in August 2004, when SUAL was the sole owner of Komi Aluminum. The banks reacted cautiously when Russian Aluminum became involved in the project in April 2005, intentionally drawing out the decision process. Finally, they demanded more information about the ownership structure of Rusal and Basic Element, which is officially the owner of all Rusal stock. Analysts estimate that Rusal is worth $10-12 billion. In additional to the requirements the banks placed on Rusal, they are demanding that Basic Element adopt a code of corporate ethics and disclose information about its investments. No requirements were made of SUAL, which has had a relationship with the EBRD for four years already. The real motivation for Rusal's cooperation with the banks may be to preserve its relationship with SUAL. Kommersant has information that Rusal proposed buying the aluminum business from SUAL owner Viktor Vekselberg. They failed to agree on a price but may still discuss the sale of SUAL's share in Komi Aluminum.
Maria Cherkasova, Dmitry Belikov
All the Article in Russian as of Jan. 18, 2006
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