US sanctions-hit Rusal rises in Hong Kong on new CEO appointment and board reshuffle

It remains unclear if the reshuffle and plan by its oligarch owner to relinquish control of Rusal’s parent firm will help it meet US demands to be extricated from imposed sanctions

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An employee marks aluminium ingots at the foundry shop of the Rusal Krasnoyarsk aluminium smelter in the Siberian city of Krasnoyarsk. Photo: Reuters

Published: 1:35pm, 24 May 2018Updated: 5:34pm, 24 May 2018

Shares of Rusal soared on Thursday in Hong Kong after the embattled Russian aluminium giant appointed an interim chief executive and announced a sweeping board reshuffle as it seeks to be extricated from sanctions imposed by the United States.

But with execution of a plan by oligarch tycoon Oleg Deripaska to relinquish control over Rusal’s parent EN+ Group still unsettled, it remains unclear how far the company is from meeting US demands for trading restrictions that are crippling its operations.

“Rusal has been making progress in demonstrating it will meet conditions for relief from the US sanctions – without which it can’t operate normally,” said Helen Lau, a Hong Kong-based metals and mining analyst at Argonaut Securities.

“But the earlier commitment for Deripaska to relinquish control in parent EN+ is still pending execution.”

Deripaska agreed late last month to reduce his 70 per cent holding in EN+ to below 50 per cent, and resign from its board. London-listed energy and resource conglomerate EN+ owns around 48.1 per cent of Rusal.

Evgeny Nikitin was appointed acting chief executive from Wednesday after the resignation of Alexandra Bouriko and until the board appoints a new chief, said Rusal – the world’s second largest aluminium producer last year – in a filing to Hong Kong’s bourse on Thursday.

He has been the Moscow and Hong Kong-listed firm’s head of aluminium division since January 2014, rising through the ranks within the company since he joined in 1993.