SHANGHAI – United Co Rusal’s CEO resigned after less than three months in the role, as the Russian firm warned that trade partners and international lenders could cut ties with the company if US sanctions aren’t lifted after October 23.
The world’s biggest aluminum producer outside China also said the sanctions could prompt severe production cuts and creditors accelerating repayments, according to a statement Thursday. The US is threatening to enforce punitive sanctions from the October date unless Rusal’s billionaire owner and founder Oleg Deripaska gives up control of the company.
CEO Alexandra Bouriko, who assumed the role on March 15, resigned along with seven directors, amid mounting pressure on Rusal after the US Treasury launched sanctions in early April, as part of retaliation against Moscow for its alleged meddling in the presidential election and other actions.
Rusal said the resignations, which included directors nominated by the Deripaska-controlled EN+ Group, were “in furtherance” of efforts to protect the interests of the company and shareholders. Deripaska has moved to distance himself from Rusal, stepping down as a director of En+ Group, which owns almost half the company and is itself subject to sanctions, and declining to seek re-election as a director. Rusal shares rose 3.7% in Hong Kong.
“With the departure of the CEO and much of the board, it looks like they are taking some initial steps to dis-attach Rusal from Deripaska,” Helen Lau, analyst at Argonaut Securities Asia, said by phone from Hong Kong. “But there are more steps ahead until Rusal satisfies the US requirements, especially about ownership.”
The US action rocked the global aluminum industry, as buyers scrambled for supplies and many firms cut their business with Rusal, which was producing about 17% of world output outside of China. The rally in aluminum prices moderated when the US offered temporary sanctions relief until October.
Rusal said it’s taking all available steps, including discussions with regulators from the US and elsewhere “in order to seek to protect the interests of its shareholders, creditors and business partners.” Rusal shares are down about two-thirds in Hong Kong since the sanctions, shrinking its market value to $3.7-billion.
The company said Evgeny Nikitin, head of its aluminum division, would act as CEO until it names a replacement for Bouriko.