The Wall Street Journal has been digging deeper into the metals warehouse logjam issue, and discovered that both Alcoa and Rusal may be beneficiaries of the situation due to the physical premiums they collect when end-users are forced to go direct to producers for metal so as to avoid queues.
According to the WSJ the aluminium makers have reaped as much as $1.4bn in revenues from higher fees due to the logjam.
The story then suggests this strips the credibility from their objections to proposed LME rules to ease the bottleneck. Read more
There’s an enlightening interview with Oleg Deripaska, chief executive of Rusal, in the Telegraph this Monday (h/t Neil Hume).
Turns out the metal tycoon believes aluminium may do better than expected this year, largely because much of the excess capacity that has plagued the industry has finally been cut back. Read more
When the chief executive of UC Rusal, Oleg Deripaska, takes to the pages of the FT to air his frustrations about his industry, you’ve got to sit up and listen. Especially when he concludes that output caps are needed to overcome the problems.
Rusal, of course, is one of the world’s top aluminium producers and Deripaska, it turns out, wants output caps because he is worried about the strange anomalies which are gripping his market. Read more
Kudos to Foreign Policy for spending a year investigating Glencore.
Did you know, for example, that the name “Glencore” comes from: GLobal ENergy COmmodities and REsources? According to Foreign Policy, this was actually considered a secret (bizarrely enough). Read more
The mystery over the ownership of a multibillion-dollar 8 per cent stake in Norilsk Nickel has deepened after privately-owned trader Trafigura, that was proclaimed to be its buyer, was revealed that it now held less than 1 per cent of the world’s largest nickel miner, the FT says, citing Trafigura’s annual accounts. Trafigura disclosed to its bondholders for the year to September 30 that it owned 0.9 per cent of the $40bn miner. The saga dates back to last December, when Norilsk said Trafigura planned to buy an 8 per cent stake in the miner, which has long been fought over by two of Russia’s biggest oligarchs; Vladimir Potanin and Oleg Deripaska, chief executive of aluminium company Rusal.
A transcript of a secretly taped conversation between Boris Berezovsky, and Chelsea Football Club owner Roman Abramovich in a Paris airport could spell bad news for tycoon Oleg Deripaska, who is facing a U.K. lawsuit over his ownership position in Russian aluminium company Rusal. The Wall Street Journal reports that the transcript seems to identify a connection between him and Michael Cherney—the Uzbekistan-born businessman suing Deripaska for about £2.5bn for allegedly cheating him out of a stake in the company. Deripaska denies that he and Cherney were ever partners or that he has outstanding debts to him. The transcript has emerged as part of evidence in another High Court tussle, this time between Berezovsky and Abramovich. It reflects a conversation between the two in a private lounge at Le Bourget airport in December 2000, which was taped by Badri Patarkatsishvili, a close friend and business partner of Berezovsky who died in 2008.
Breaking pre-market news on Monday,
- IG Group updates Q3 revenue forecast on “record levels of client activity” — statement. Read more
Last week was London Metal Exchange week.
And it turns out, the topic of debate, according to Société Générale’s cross-asset research analysts at least, was nothing other than the upcoming splurge of physically-backed commodity ETFs that’s about to hit the market. Read more
Renaissance Capital, the Moscow-based investment bank, is opening an office in Hong Kong in expectation that a wave of Russian companies will choose to sell shares in the city. The move comes five months after Rusal, the aluminium group controlled by Oleg Deripaska, became the first Russian company to list on the Hong Kong stock exchange, the FT reports.
Oleg Deripaska, the Russian billionaire, is preparing to float a second resource company in Hong Kong just three months after the controversial $2.2bn initial public offering of Rusal, his aluminium group, reports the FT. Strikeforce Mining and Resources aims to raise as much as $200m this month, according to people close to the deal, in what would be the second Hong Kong share sale by a Russian company.
Why would a Russian aluminium producer be interested in launching an exchange-traded fund business? The background here is that Rusal announced last week that it would provide further details of a possible physical ETF to be backed by 1m tonnes of metal in the second half of this year. The move is intriguing since, as every aluminium market watcher knows, the world is currently awash with aluminium. More analysis on FT Alphaville. Read more
Oleg Deripaska, chief executive of UC Rusal, will pocket bonus shares worth more than US$60m for his role in preparing the company’s Hong Kong and Paris listings in January, the FT reports. The bonus amounts to 8.5 per cent of the Russian aluminium producer’s net profit last year. Lex says this amounts to looting the company.
From Finans magazine, a list of rich Russians. Commentary (in Russian) here and an unsatisfactory Google translation is available here.
Note the toppling of Roman Abramovich, replaced by Vladimir Lisin, who controls Novolipetsk – a steel complex south east of Moscow that sports its own zoo. Read more
A date for Asian diaries:
Event: Russia – Capital Raising and Investment Summit – Hong Kong Read more
Breaking pre-market news on Friday,
- Rusal raises $2.2bn in Hong Kong IPO – Bloomberg. Read more
For the last year Oleg Deripaska has been a man on a mission.
And after months of wrangling with regulators, UC Rusal, his heavily indebted aluminium company, looks finally to have won approval for a $2bn float in Hong Kong and Paris come January. Read more
SocGen’s uber-bear Albert Edwards has been at it again, predicting on Monday that markets worldwide will hit a fresh low in 2010 and suggesting that a new global recession is on the way. Oh, and faith in growth stories is a “sick joke”, he noted.
Whether it’s a “sick” faith in growth stories or the usual burning desire for a quick buck, Asia isn’t listening as it prepares for the biggest wave of equity offerings the region has seen in a long time — nearly $14bn worth in coming weeks. Read more
Oleg Deripaska’s UC Rusal has pledged 25% stakes in its main aluminium subsidiaries to the Russian state as an additional condition to a $4.5bn government bail-out loan, the head of the state-owned bank VEB has revealed. The disclosure highlights the extent of Moscow’s grip on Deripaska’s metals empire as he battles to restructure nearly $17bn in loans from foreign and Russian banks. It had already been revealed that Rusal pledged its 25% stake in Norilsk Nickel, the world’s biggest nickel miner, as collateral to VEB.
Oleg Deripaska, the Russian billionaire, is to return as chief executive of Rusal, one of the world’s biggest aluminium producers, after being re-elected by the board, the company said Sunday. Deripaska, Rusal’s majority shareholder, returns to the more direct hands-on role comes as the company battles to survive the global credit crisis and plummeting revenues due to the drop in commodity prices. It is seeking to restructure $14bn of debt it owes to foreign and Russian banks. The move also comes amid talk of reviving plans for a three-way merger between Rusal, Norilsk Nickel, the world’s biggest nickel miner, and Metalloinvest, the steel and iron ore group, to create a metals and mining giant on a par with BHP Billiton.
The High Court this week began hearing the case of Tajik Aluminium Plant v Abdukadir Ganievich Ermatov. While it has failed to make many UK headlines (as yet), its tale of intrigue, corruption and even a potential murder is topping newspapers across most of central Asia.
Not only is it expected to price-in as one of the UK’s most expensive cases ever (some estimate at about £90m in legal fees), it could offer an intriguing insight into the affairs of some of the world’s most secretive business characters. For one, the case is linked to the familiar name (of late) of Oleg Deripaska via his control of Russian aluminium group Rusal. Read more
As if it were a terrible vice, syndicated loan bankers spent the first part of this decade swearing they would never go back to Russia, says Loanradar’s Tom Freke. With many fingers burnt to a crisp in 1998, and having a long collective memory, Western bankers took years to return to Russia.
However, oil and gas money has brought “billions of dollars worth of reasons to forgive and forget”, and so many European and American banks have been making the flight out east, seeking to partner up with the strengthening Russian state, he notes. Read more
United Co. Rusal is poised to take a 25% stake in Russia’s Norilsk Nickel, which may lead to full control of the world’s largest nickel producer and further the Russian aluminum giant’s ambition to become a mining power, reports the Wall Street Journal. The stake in Norilsk, the world’s top nickel producer by output, was expected to become available Friday. Norilsk shareholder Vladimir Potanin is expected to reject a chance to buy the 25% stake from former business partner Mikhail Prokhorov for $15.7bn, a person familiar with the matter said. While Potanin would like to acquire the stake, he believes the asking price is too high and that he has been given too little time to gather the money, this person said. Rusal, controlled by Russian billionaire Oleg Deripaska, has already said that it wants to acquire the stake. Prokhorov’s holding company, Onexim Group, has said it would sell to Rusal for an 11% stake in Rusal and an undisclosed amount of cash if Potanin passed. A spokesman for Onexim said it was still waiting for a response from Potanin but has no plans to amend the offer.
Citigroup has failed to secure $10bn in financing for Vladimir Potanin, the Russian oligarch, because of continuing turmoil in the credit markets, reports The Times. Potanin’s inability to raise financing in London means he will almost certainly fail in his bid to find $15.7bn to buy a 25% stake in Norilsk Nickel, the world’s largest nickel miner. If Potanin falls short of the $15.7bn target by 6pm Friday, the stake will be sold to Rusal, the Russian aluminium giant. Mr Potanin had a pre-emptive right to buy a 25% stake in Norilsk after it was put up for sale by his partner Mikhail Prokhorov.
United Company Rusal, the world’s largest aluminium producer, has decided to delay its planned London listing because of market conditions. The private Russian company, which is 66% controlled by Oleg Deripaska, had planned to sell 25% of its equity and had hoped to raise more than $7.5bn in a float that would have rivalled the $8bn offering by Russia’s VTB Bank in May as the year’s biggest London IPO. People close to Rusal said the board decided Wednesday to postpone the IPO this year because of market turmoil and liquidity worries.
The ￡3.75bn stock market listing of Russian mining giant Rusal is in the balance as key executives from the world’s biggest aluminium producer are locked in talks with the UK regulators over the disclosure of potential legal liabilities the company may face, reports the Observer. Rusal needs the green light from the FSA, which assesses the suitability of companies to raise money on the public markets, before proceeding with a London float. But sources suggest there are several potential sources of legal disputes, including a law suit filed by oligarch Michael Cherney against against Rusal chairman Oleg Deripaska over a deal under which Cherney sold his shares to Deripaska.
Mikhail Cherney, a controversial founding father of the post-Soviet aluminium industry, is making an appeal in the London High Court claiming a 20 per cent stake in Rusal, part of the Russian aluminium group United Company Rusal now gearing up for a full listing on the LSE. Mr Cherney told the FT his lawyers had gathered thousands of documents to prove his partnership with Rusal owner Oleg Deripaska, including via Radom, a Liechtenstein-based foundation. Mr Deripaska, Russia’s second richest man, denies any previous business relations with Mr Cherney.
Russia’s Rusal, the world’s largest aluminium producer, on Thursday took the first concrete steps towards a flotation on the main market of the LSE in what could be one of the biggest IPOs globally this year, reports the FT.
The company had previously said it planned an IPO within three years but Rusal was on Thursday poised to appoint six investment banks to manage the offering, to take place by the end of the year, possibly in November, according to people familiar with the matter. Read more