En+ Group PLC will form a new majority independent board at United Co. Rusal PLC under the terms of an agreement to lift sanctions on companies controlled by Kremlin-associate Oleg Deripaska, according to a statement by the U.S. Department of the Treasury's Office of Foreign Assets Control.
En+ committed to using its majority control of the aluminum-maker to create a new board of 14 members including eight independent nonexecutive directors with "no business, professional or family ties to Deripaska" or other persons subject to sanctions, the Treasury Department said in a statement posted on its website.
Rusal Chairman and Nord Stream 2 AG CEO Matthias Warnig will step down and be replaced by one of the new independent board members under the conditions of the agreement with the Office of Foreign Assets Control, or OFAC.
Rusal founder Deripaska, the target of the sanctions imposed in April, will not be able to appoint board members. Furthermore, Deripaska will only retain a 0.01% direct shareholding Rusal, and any dividends are to be placed in a "blocked account," the statement said.
The company could see the sanctions lifted within 30 days unless the U.S. Congress rejects OFAC's conditions or seeks amendments. En+ warned in a Dec 20 press release that this is possible.
OFAC's notification is subject to a 30-day review period during which Congress could pass a joint resolution of approval or disapproval, though it is not required to do so. En+ stressed that there can be "no assurance" Congress will not seek amendments, which could be of a "material nature," and cautioned that Congress could still reject the conditions or try to prevent their implementation.
OFAC has repeatedly pushed back the deadline for investors to wind down their positions in Rusal, En+ and GAZ Group as it reviewed the companies' proposed structural changes.