Rusal comes unstuck in Nigerian court over some sticky business
The stock price of Hong Kong-listed Russian aluminium company Rusal slipped to a record low yesterday of HK$4.29, a decline of 1.6 per cent. This may not be unconnected with a ruling by Nigeria's Supreme Court at the end of last week saying it was illegal for Nigeria's privatisation agency, the Bureau of Public Enterprises, to sell the Aluminium Smelter Company of Nigeria (Alscon) to Rusal. The court has nullified the deal, thus bringing to a close a case that has dragged on for eight years.
Rusal secured Alscon in December 2006 with a bid of US$250 million in shares, US$130 million cash and a raft of conditions, the Russia-based website Dances with Bears reports. With this bid, Rusal arranged with Nigeria's privatisation agency to overrule a US$410 million cash offer by the Bancorp Financial Investment Group Divino Corporation (BFIG), a Nigerian-American group based in Los Angeles. The latest judgment cannot be appealed and overrules decisions by the trial court and the Court of Appeal that went in Rusal's favour. BFIG initially launched its first suit in Manhattan, charging Rusal with conspiracy to commit fraud. A US judge subsequently ordered Rusal to face trial in Nigeria. Rusal noted the ongoing litigation in its 2009 prospectus, observing that in the event of a decision against Rusal, 'directors do not believe that any resulting liabilities will materially adversely affect the Group's financial position or its operations as a whole'. Rusal had not mentioned the court developments on its website as of yesterday.
The court ruling comes on the eve of yet another court case - Michael Cherney's long-awaited attempt in London's High Court to recover a 13 per cent holding in Rusal from the company's founder and controlling shareholder Oleg Deripaska. Deripaska, through En+, owns 47.4 per cent. Other shareholders, including Mikhail Prokhorov's Onexim Group, own 17.02 per cent and former chairman Viktor Vekselberg's Sual owns 13 per cent. If Cherney succeeds in court, Deripaska will be reduced to 34.4 per cent of the company while the minorities will command 43.02 per cent, meaning that Deripaska could lose control of Rusal.
Fear of flying
We've been wondering how Air China Fright came by its name. The name appears on the flight information website of Shenzhen's airport. It apparently flies scheduled flights out of Shenzhen and Pudong in Shanghai, and possibly elsewhere. We are assuming that something got lost in translation and the English name should have been Air China Flight. But since the English name is unimportant in China, perhaps nobody thought it was worth the effort of changing. That's assuming it was an error. Maybe it was thought the name added an appealing frisson. Then again it could be one of those refreshingly frank names that describes exactly what's in store for passengers once they step aboard - the fright of your life.
