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Report: Oleg Deripaska's En+ stake to go below 45% under sanctions relief plan


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Report: Oleg Deripaska's En+ stake to go below 45% under sanctions relief plan

Oleg Deripaska's En+ Group PLC submitted the final version of its proposal to the U.S. Treasury's Office of Foreign Assets Control as it looks to be removed from the U.S. sanctions list, the Financial Times reported Aug. 12, citing sources.

The proposal will see Deripaska reducing his stake in the London-listed company to below 45%, from around 70% currently, mainly via a share transfer to Russian bank VTB, which is also covered under the U.S. list of sanctioned companies for its links to Andrei Kostin.

The bank will hold the shares briefly until the sanctions are lifted, following which they would be sold to cover Deripaska's loans. According to the London-based news outlet's report, VTB has been a key creditor to Deripaska's companies, but said in May that it had ceased lending to the businessman.

Both Deripaska and Kostin were designated as individuals sanctioned by the U.S. Treasury Department in April for profiting from Russia's "malign activity around the globe." The sanctions also covered United Co. Rusal PLC, which is controlled by EN+.

Deripaska has previously stepped down from the boards of both En+ and Rusal, with both companies electing a new board of directors in a bid to ease the sanctions.

Rusal was widely rocked by the sanctions, with the aluminum producer recently shutting down production at the Nadvoitsky aluminum smelter, noting that it could be forced to shut down more of its output if sanctions are not lifted. In the second quarter, the aluminum producer's profit marked a 25.0% decline quarterly to US$408 million.

In late July, the U.S. Treasury Department extended the deadline for trading in Russian firms Rusal, En+ and Gaz Group to Oct. 23 from the previous deadline of Aug. 5.