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U.S. Treasury Grants Russia's Rusal More Time For Bid To Waive Sanctions

Russian aluminum tycoon Oleg Deripaska
Russian aluminum tycoon Oleg Deripaska

The U.S. Treasury Department says that it has extended the deadline for investors to divest holdings in the sanctioned Russian companies En+, GAZ Group, and Rusal from August 5 to October 23.

The Treasury in April imposed sanctions against Russian billionaire Oleg Deripaska and eight companies in which he has large holdings, including aluminum giant Rusal, in response to what it called Russia's "malign activities."

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 its ties with Deripaska, who has ties to the Kremlin.

U.S. Treasury Secretary Steven Mnuchin said last week that the United States was in productive talks with Rusal to remove it from Washington's sanctions list.

The company has taken a number of steps, including revamping its board, in the hope of escaping the U.S. blacklist.

The extension of time granted by the Treasury on July 31 gives Deripaska more time to implement a plan to cut his influence in the business.

Deripaska in April agreed to cut his stake in En+ to less than 50 percent and to appoint a majority of independent directors to the company’s board.

Three months after announcing the plan, however, the company hasn’t publicly identified any potential independent directors, nor any buyer for Deripaska's shares.

Based on reporting by Reuters and Bloomberg

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