United Co Rusal’s chief executive officer resigned after less than three months in the role as the Russian firm warned that trade partners and international lenders could cut ties with the company if US sanctions are not lifted after Oct. 23.
The world’s biggest aluminum producer outside China yesterday said in a statement that the sanctions could prompt severe production cuts and creditors accelerating repayments.
The US is threatening to enforce punitive sanctions from the October date unless Rusal’s billionaire owner and founder Oleg Deripaska gives up control of the company.
CEO Alexandra Bouriko, who assumed the role on March 15, resigned along with seven directors, amid mounting pressure on Rusal after the US Department of the Treasury early last month launched sanctions as part of retaliation against Moscow for its alleged meddling in the 2016 US presidential election and other actions.
Rusal said the resignations, which included directors nominated by the Deripaska-controlled EN+ Group PLC, were “in furtherance” of efforts to protect the interests of the company and shareholders.
Deripaska has moved to distance himself from Rusal, stepping down as a director of En+ Group, which owns almost half the company and is itself subject to sanctions, and declining to seek re-election as a director.
Rusal shares rose 3.7 percent in Hong Kong.
“With the departure of the CEO and much of the board, it looks like they are taking some initial steps to disattach Rusal from Deripaska,” Helen Lau, analyst at Argonaut Securities Asia Ltd, said by telephone from Hong Kong. “But there are more steps ahead until Rusal satisfies the US requirements, especially about ownership.”
The US action rocked the global aluminum industry, as buyers scrambled for supplies and many firms cut their business with Rusal, which was producing about 17 percent of world output outside of China. The rally in aluminum prices moderated when the US offered temporary sanctions relief until October.
Rusal said it is taking all available steps, including discussions with regulators from the US and elsewhere “in order to seek to protect the interests of its shareholders, creditors and business partners.”
Rusal shares are down about two-thirds in Hong Kong since the sanctions, shrinking its market value to US$3.7 billion.
The company said that Evgeny Nikitin, head of its aluminum division, would act as CEO until it names a replacement for Bouriko.
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