Report: EN+ hires Rothschild to sell down Oleg Deripaska’s stake
MOSCOW, Jun 4 (PRIME) -- Oleg Deripaska’s sanctions-hit energy-to-aluminum group EN+ has hired investment bank Rothschild to sell off part of the Russian oligarch’s controlling stake, as the company races to meet an August 5 deadline to win a reprieve from the U.S. Treasury, the Financial Times reported Monday citing sources familiar with the matter.
U.S. sanctions imposed on Mr Deripaska in April cut him and his entire business empire off from the global banking and commodity trading system, pitching EN+ and his aluminum producer RUSAL into crisis.
Since then the companies have scrambled to distance themselves from the oligarch in an effort to convince Treasury officials to grant them a waiver that would allow them to continue doing business.
Under a plan led by Greg Barker, EN+’s independent chairman, the company has hired the Franco-British investment bank to assist with finding new investors that would reduce Mr Deripaska’s stake in the company from 66% to below 50%, people with knowledge of the decision told the Financial Times.
EN+ has also hired New York-based recruitment agency Russell Reynolds to help find new independent directors for the company, the people said.
News of Rothschild and Russell Reynolds’ appointments comes three days after the U.S. Office of Foreign Assets Control, which oversees sanctions policy, granted EN+ a two-month extension of a deadline banning trading in the company, to August 5.
Lord Barker said last week that Mr Deripaska’s departure last month from the boards of EN+ and RUSAL was “just the start of the sweeping changes to come.”
Any potential share transaction or hiring of new directors would only be taken if EN+ is given a commitment by the U.S. Treasury that the actions would result in sanctions being lifted.
EN+ declined to comment. Rothschild and Russell Reynolds did not immediately respond to requests for comment.
The U.S. Treasury has already granted EN+, RUSAL and Mr Deripaska’s automotive company GAZ Group two extensions to the initial May 5 deadline for trading in the companies, giving them more time to find new owners that would end the oligarch’s control.
The U.S. government has indicated that it would remove the sanctions on Mr Deripaska’s businesses if he gave up control, following frantic shuttle diplomacy between London, Washington and Moscow by Lord Barker, a former U.K. energy minister and member of the country’s upper house of parliament.
Lord Barker was appointed chairman in October ahead of the company’s listing in London a month later, where it raised 1 billion pounds from City investors. British MPs last month called for the U.K. to close “the gaps in the sanctions regime” that allowed the listing, and criticized law firm Linklaters for assisting with the flotation.
EN+ owns 48% of RUSAL, and Mr Deripaska has already agreed to rip up a shareholders agreement that gives him control of the aluminum producer. Last month saw a mass resignation of RUSAL directors with any links to the oligarch.
Washington imposed sanctions on Mr Deripaska and six other oligarchs in response to the Russian government’s “malign activity”, sending shockwaves through the country’s economy and global markets.
RUSAL is the world’s largest aluminum producer outside of China and an integral part of the metal’s global supply chain. The sanctions have spooked commodity traders and sparked calls for a softening of the measures from major E.U. governments.