Published: Tue, April 10, 2018
Economy | By

Rusal shares plunge over 40 percent on U.S. sanctions

Rusal shares plunge over 40 percent on U.S. sanctions

The firm, which produces nearly 6% of the world's aluminium, said the sanctions could cause technical defaults on bank loans and some credit obligations.

Separately, Rusal warned that the sanctions impact "may result in technical defaults in relation to certain credit obligations of the group, and the company is now evaluating the impact (if any) of such technical defaults on the financial position of the group".

The fall wiped more than 3.5 billion euros ($4.3 billion) off the market capitalisation of the company which is headed by billionaire Oleg Deripaska and accounts for some seven percent of the world's aluminium production. Any assets the seven have under USA jurisdiction have been frozen and U.S. nationals are forbidden from doing business with them. "We have a whole list of possible measures that are being studied", Tass cited Zakharova as saying.

The Kremlin slammed the sanctions.

"Rusal will probably have to be bailed out by Russian state banks", wrote analysts at TS Lombard. Polymetal, a Russian miner listed in London, was the biggest FTSE 250 faller, down 18%.

The commodity giant is one of Rusal's top shareholders and the biggest buyer of its metal, while Mr Glasenberg sits on the board. Glencore shares fell 3.4% to a four-month low. Privately held companies owned or controlled by Deripaska were also sanctioned.

The action targeted Russian oligarchs whose companies have wide-ranging involvement in worldwide capital markets. He features in Robert Mueller's investigation into Russian meddling in the U.S. election because of his ties to Paul Manafort, Donald Trump's former campaign chairman.

"This is an outrageous business from the point of view of illegality, from the point of view of flouting all the norms, and of course careful analysis is needed here", Putin's spokesman Dmitry Peskov told journalists.

The US Treasury said the sanctions were linked to Russia's actions in Crimea, Syria and Ukraine and its interference in western democracies.

The company said the sanctions were likely to have a "materially adverse" impact on its business and finances.

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