United Company Rusal, the aluminium giant in effect controlled by Russian oligarch Oleg Deripaska, has called in the London office of investment bank Rothschild to restructure its $14bn (£9.5bn) debt burden.
Mr Deripaska made headline news last year after shadow Chancellor George Osborne was accused of soliciting a £50,000 donation from him, in a way that could have breached parliamentary guidelines. Nathaniel Rothschild, who was caught in the middle of the affair, is the son of Jacob, who split from the bank that his family founded, after a row in the 1980s.
– Deripaska Returns as Rusal CEO to Counter Crisis (Bloomberg)
– Oleg Deripaska: profile of a major foreign borrower (Telegraph)
A senior mining banker said: “There is some speculation that there are some covenant problems at Rusal. Rothschild was hired around the Christmas holiday period.”
Rusal is part of a plan put by Russian tycoons to the Kremlin to consolidate three mining giants to create a national champion. According to reports on Friday, Rusal would be merged with Norilsk Nickel – in which it already owns a stake of over 25 per cent – and iron ore group OAO Metallo-invest. The group would have a combined turnover of more than $40bn.
Mr Deripaska spent a year attempting a hostile merger with Norilsk, but the companies agreed a truce in November. The oligarch had to be bailed out by the Russian state with a $4.5bn loan to pay off debts related to Rusal. A spokesman for Rusal declined to comment.
In other mining news, Rio Tinto chairman Paul Skinner is to stand down next month, to be replaced by Tata Steel’s deputy chairman, Jim Leng. Mr Skinner is expected to become the chairman at oil giant BP.
Rio Tinto was subject to a $135bn bid from rival BHP Billiton last year. It would have been the second-biggest takeover in corporate history, but failed because of the market turmoil.
By Mark Leftly
Sunday, 18 January 2009
Source: The Independent