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U.S. Extends Deadline For Investors To Divest Rusal Holdings

Russian aluminum giant Rusal has been given more time to make corporate changes, including breaking ties with billionaire Oleg Deripaska.
Russian aluminum giant Rusal has been given more time to make corporate changes, including breaking ties with billionaire Oleg Deripaska.

The U.S. Treasury Department has extended until November 12 a deadline for investors to divest holdings of debt, equity, and other assets in sanctioned Russian aluminum giant Rusal and its parent holding company, EN+.

The announcement on September 21 said the extension was being provided to allow the companies to make “corporate governance changes,” one of which was the breaking of ties with sanctioned Russian billionaire Oleg Deripaska.

However, the announcement kept in place an October 23 deadline for divesting holdings in automaker GAZ Group.

The Treasury had previously extended the deadline for the companies from August 5 to October 23.

The sanctions were imposed against Deripaska and eight companies in which he has large holdings, including Rusal, in response to what U.S. officials called Russia's "malign activities," including alleged interference in the 2016 U.S. presidential election.

The sanctions primarily targeted Russian oligarchs close to President Vladimir Putin.

Deripaska has held a controlling interest in En+, which in turn controls Rusal, the world's largest aluminum producer outside of China. Automaker GAZ is also part of his business empire.

The sanctions against Rusal initially disrupted the global supply chain for aluminum and sent prices soaring, raising fears that the company would be unable to finance its operations and stay in business.

The scare prompted Rusal to accept the Treasury's offer of an exemption from the sanctions if it severs ties with Deripaska.

Rusal is the second-largest aluminum company in the world and an employer of an estimated 61,000 Russian miners and manufacturing workers

U.S. Treasury Secretary Steven Mnuchin has said the United States was in talks with Rusal to remove it from the sanctions list.

Mnuchin said Deripaska was the main target of the sanctions and that it was not Washington's intent to cause the layoff of hundreds or thousands of Russian aluminum workers.

"EN+ and Rusal have approached the U.S. government about substantial corporate governance changes that could potentially result in significant changes in control," the Treasury said in its latest statement.

"To allow sufficient time for review, we are extending these licenses until November 12," it said.

With reporting by Reuters, TASS, and Bloomberg
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