Rusal bailout may include Aughinish unit

AUGHINISH ALUMINA’S parent company, Rusal, has pledged 25 per cent of its aluminium subsidiaries to the Russian state as an additional condition to a $4.5 billion government bailout loan, the head of the state-owned bank VEB has revealed.

The disclosure of the pledges on the $4.5 billion loan Rusal got last autumn from VEB has provided further evidence of the extent of Moscow’s grip on the metals empire of oligarch Oleg Deripaska, who controls Rusal, as he battles to keep it afloat and restructure nearly $17 billion in loans to foreign and Russian banks.

It had already been revealed that VEB had also pledged its 25 per cent stake in Norilsk Nickel, the world’s biggest nickel miner, as collateral.

In an interview with the Financial Times, Vladimir Dmitriev, VEB chairman, said his bank had taken collateral that fully covered the value of the $4.5 billion bailout loan his bank issued last October to prevent the Norilsk stake being seized by western creditors.

“From the point of view of security, VEB is probably in a better position than any of the western or Russian creditors,” he said.

He declined to name the subsidiaries, however, saying only that his bank had taken pledges for 25 per cent stakes “in a series of aluminium enterprises that are key for Rusal”.

“These are the company’s most serious assets,” he said.

Limerick’s Aughinish Alumina is the largest alumina refinery in Europe and the largest of the nine alumina facilities operated by Rusal. According to Rusal’s website, it contributes €100 million to the local economy.

Mr Dmitriev was speaking as Rusal embarks on restructuring talks with more than 70 foreign creditors after reaching a two-month standstill agreement on principal payments on $7.4 billion in loans.

Foreign creditors are anxious to gauge the level of state support for the restructuring after the Russian government suspended a $50 billion bailout for Russian companies’ foreign debts as hard currency reserves dwindled.

He reiterated the Russian government had no interest in taking over companies from private owners, but in a veiled reference at the heavy borrowings by Mr Deripaska, he said: "The state does not intend to replace private owners. But it's a different matter that the state is interested in making sure that key Russian companies are managed adequately." – ( Financial Timesservice)