UPDATE: RUSAL may default on some liabilities due to new sanctions
(Adds data on stock, aluminum trading in paragraphs 4Ц5)
MOSCOW/WASHINGTON, Apr 9 (PRIME) -- Russian aluminum giant UC RUSAL may default on some loan liabilities because of the new sanctions imposed by the U.S., the company said in a statement released on the Hong Kong Stock Exchange on Monday.
On April 6, the U.S. has imposed sanctions against a total of 38 Russian tycoons, officials and companies, including Oleg Deripaska.
УThe company assesses that the OFAC Sanctions may result in technical defaults in relation to certain credit obligations of the group, and the company is currently evaluating the impact (if any) of such technical defaults on the financial position of the group. The company is currently in compliance with its credit and financial obligations (including repayment obligations) in all other respects. The company intends to continue to fulfill its existing commitments in accordance with applicable legal and regulatory requirements,Ф the statement read.
The companyТs shares dropped 46.9% at the start of trading on the Moscow Exchange on the default news. Earlier, the stock plummeted 41.8% on the Hong Kong Stock Exchange.
Aluminum prices rose 2% to their maximum from March 22 on the London Metal Exchange.
RUSAL may also delay releasing its annual report for 2017, the company said. УA further announcement will be made as soon as possible in this regard.Ф
The company also said that its initial assessment of the impact of the sanctions showed that Уit is highly likely that the impact may be materially adverse to the business and prospects of the group.Ф
Forbes magazine reported on April 6 that the fortune of Deripaska dropped by U.S. $927 million during one day on the introduction of the sanctions.
Deripaska told PRIME through his representative on April 7 that he would analyze and comment on the situation after Easter celebration.
Aside from Deripaska, the list of businessmen includes tycoons Viktor Vekselberg and Suleiman Kerimov.
The founder of law company Marks & Sokolov Bruce Marks told PRIME on April 7 that the new sanctions would impact the Russian economy and businesses significantly. У(Vekselberg, Deripaska and Kerimov) are the big three, they all participate in RussiaТs exports including exports of aluminum, carsЕ These are big companies, in which many people work. They will be substantially hurt by inability to use the U.S. dollar banking system,Ф Marks said.
A representative of the U.S. State Department told PRIME that the new sanctions are a УsignalФ to Russia and they do not mean that Washington wants to tear up the dialogue between the two countries. He added that the sanctions imply that people on the list cannot obtain a U.S. visa and enter the country.