Oleg Deripaska decided to get off with a little blood

Scandalous businessman may refuse to control "Rusal".
The reshuffle in the management of Rusal, which followed the demonstration of the US Treasury's readiness for a dialogue on the lifting of sanctions, is coming to its apogee. Oleg Deripaska, the founder and main shareholder of the aluminum company, agreed in principle to the loss of control over it by reducing its stake in the holding company En +. Who can enter the capital of En +, it is not yet clear: in the industry it is assumed either a large business with a good reputation in the West, or Russian state banks or government agencies that are not afraid of sanctions. According to Kommersant's familiar sources, Oleg Deripaska has already entered into a dialogue with his partners in RusAl, including with another person involved in the sanctions list, Viktor Vekselberg, about the dissolution of the shareholder agreement.

The controlling shareholder of En + Group Oleg Deripaska (who owned 66% of the shares at the end of 2017) "agreed in principle" with the proposal of the head of the board of directors of En + Lord Gregory Barker to reduce his share below 50%, the group said on April 27. How and in what time the businessman can reduce his package, is not disclosed. Mr. Deripaska also agreed to withdraw from the board of directors of En + and supported Mr. Barker's proposal to appoint new directors to the board so that his majority would be independent members.

These steps are caused by the fact that on April 6, the Office of Foreign Assets Control (OFAC) of the US Treasury included Oleg Deripaska, as well as Bazel, En + Group, RusAl, GAZ Group and other assets controlled by him, in the SDN list banning business from residents of the United States and access to the financial system of the States. En + also said that on April 26, it appealed to OFAC with a request to extend in its respect the operation of General License No. 13, which allows US residents to withdraw from the debt and shares of sanction companies, until October 31. Directly about the request of OFAC to exclude En + from the SDN-list in the message is not said, but it is noted that the actions of Oleg Deripaska are dictated by the interaction of the group with the department.

On April 23, the head of the US Treasury, Stephen Mnuchin, stated that Rusal had already asked to exclude the company from the list. The OFAC clarification stated that the company could be released from sanctions if Deripaska lost control over it. Formally, En + owns only 48.13% of Rusal's shares, but the group controls it through the board of directors in agreement with other major shareholders - Victor Vekselberg and Leonard Blavatnik's Sual Partners (26.5%) and Glencore trader (8.75%). While En + owns 40% of Rusal, at least half of its board of directors should be the candidates of the group (not including independent). If Oleg Deripaska reduces his stake in En + to at least 49%, for which he will have to sell about 17% of the shares (which cost the Moscow stock exchange on Friday 29.4 billion rubles), then the formal control of the businessman over Rusal will be lost, although En + itself will save it.

Rusal, in turn, will completely restructure its board of directors and management to ensure that the company is excluded from the US Treasury's SDN list, Reuters reported April 27, citing informed sources. The new board of directors of the company, which will be appointed shortly, will consist entirely of independent members, they say. Two sources familiar with the situation confirmed this information to Kommersant; one assures that "active work is being done in this direction". The first steps have already been taken: the president of RusAl, Vladislav Solovyov, who already led the holding in 2008-2010, and later worked as the first deputy general director and general director of Rusal (until March, when he was appointed president instead of Oleg Deripaska) leaves En +.

The interlocutor of Kommersant in one of the investment companies points out that the surrender of control in En + to Oleg Deripaska seems to be the best option for other shareholders of Rusal, as it does not necessarily lead to the termination of the agreement that gives them extended rights. True, Viktor Vekselberg and his Renova also got into the SDN-list. A source, "Kommersant", familiar with the situation, assures that the shareholders of "Rusal" are already holding consultations on the issue of breaking the agreement. Two other well-informed sources at Kommersant note that even the break of the agreement does not look like a panacea without a significant reduction in the shares of Vekselberg and Deripaska in Rusal, because in total two participants of the SDN list will retain control over him. After the introduction of sanctions, Renova reduced its share in the Swiss Sulzer to 48% (the shares were purchased by the company itself), but "this is a completely different story," says one of them. The interlocutor of "Kommersant" in the investment company believes that the events and statements of the last week are the result of interstate agreements at the highest level (formally the heads of the RF Ministry of Finance and the US met on April 20 in Washington). "It's a feeling that the rules of the game were marked in the public field in order to comply with all formalities, but do not let OFAC turn on the back," he says. Assuming potential buyers of a part of Oleg Deripaska's package in En +, Kommersant's interlocutors found it difficult: they can be both big businessmen with a good reputation in the West, and Russian state banks or state structures that are not afraid of sanctions, they argue.

Representatives of En +, Rusal, Glencore declined to comment, representatives of Oleg Deripaska, Viktor Vekselberg and the US Treasury on April 27 did not respond to Kommersant.

Part of the share of Oleg Deripaska's share in En + can be either the group itself or third parties who are not residents of the United States, believes Alexey Panich, Herbert Smith Freehills partner, with the second option likely to be preferable for OFAC, which buyers will have to consult on the application or non-application of secondary sanctions to them as a result of the transaction. It is difficult without access to the document to unequivocally talk about how the decline in the share of a businessman in En + will affect the shareholder agreement of "Rusal", but most likely, it will remain in force, as the party should be En +, not personally Oleg Deripaska, the lawyer notes. However, even if the agreement is broken and the share of the businessman is reduced, this option may not work, Mr. Panich believes: OFAC does not work so straightforwardly and it can create a dangerous precedent for management - the deletion from SDN in a few weeks, due only to the fact that the shareholders refused from control for the purpose of lifting sanctions.