Rusal deep in crisis, says Vekselberg as he quits

RUSSIAN billionaire Viktor Vekselberg quit yesterday as the chairman of the largest aluminium producer, Rusal, saying the heavily indebted company was in deep crisis after a long battle with fellow oligarch Oleg Deripaska.

The resignation tightens Deripaska’s grip on Rusal but the company faces a struggle to recover because of a fall in global aluminium prices and its large debt, acquired when it purchased a stake in Norilsk Nickel, the largest nickel and palladium producer.

“I regret to say at this time that Rusal is in a deep crisis, caused by the actions of the management,” said Vekselberg, listed by Forbes magazine as Russia’s eighth-richest man.

Rusal shares were suspended in Hong Kong after falling 1.3 percent to HK$6.12 (R5.97) yesterday morning, lagging a 0.8 percent gain in the benchmark Hong Kong index, and 43 percent below its initial public offering price of HK$10.80.

Rusal called for the temporary halt to share trade and issued its own statement, accusing Vekselberg of failing to fulfil the role of chairman and indicating that he would have been removed in any case.

“Vekselberg had failed to perform his functions as a public company board chairman over the past 12 months,” it said in a statement to the Hong Kong exchange, adding that he had not attended a board meeting since February 2011.

Vekselberg, who has a 15.8 percent stake in the company along with his partners, had disagreed with fellow billionaire Deripaska, Rusal’s chief executive, over selling the company’s 25 percent stake in Norilsk Nickel.

Rusal said the board would meet on Friday to appoint an independent director to replace Vekselberg. – Reuters