Rothschild Bank will help Deripaska's company get out of US sanctions

The Franco-British investment bank Rothschild will help En+, which is under American sanctions, sell part of the controlling stake in Oleg Deripaska, and the New York agency Russell Reynolds will help hire new directors of the company, writes the Financial Times. But the consultants have very little time - the US Treasury has extended the period during which Deripaska’s companies can conduct business with Western companies only until August 5.

Details

• The plan to find new investors to reduce Deripaska's stake in En+ from the current 66% to less than 50% was developed by a team led by En+ independent director Greg Barker. It was Lord Barker, the former UK Energy Minister and member of the highest house of the British Parliament, who led active negotiations between Moscow, Washington and London on revising sanctions against the energy and metallurgical holding.
• FT sources report that En+ has attracted not only Rothschild bank to implement its plan, but also the New York recruiting agency Russell Reynolds, which should help the company find new independent directors.
• Deripaska is ready to sell part of the shares and hire new directors only on the condition that the US Treasury lifts previously imposed sanctions.

Context

• Last week, the US Treasury extended the deadline for the sale of assets of En+, UC Rusal and the GAZ group until August 5.
• At the end of April, the Treasury Department's Office of Foreign Assets Control (OFAC) indicated that "the path to lifting sanctions lies through the relinquishment of [Deripaska's] control in the company." Deripaska agreed to a plan to remove En+ and Rusal from his control. Previously, he had already officially resigned from the board of directors of Rusal.
• Deripaska is ready to reduce his stake in the GAZ group, Bloomberg found out on Friday. Negotiations are underway with minority shareholders, including with the head of the board, director of the GAZ group, the former head of the Austrian Magna, Siegfried Wolf.
• Deripaska's departure from En+'s board of directors is only "the beginning of major changes at the company," Lord Barker said last week. Earlier, Kommersant also found out that Deripaska’s representatives on the board of directors could be replaced by regional managers and foremen from Rusal factories, and the shareholder agreement, according to which En+ is the controlling shareholder of Rusal, could be terminated.

What's in it for me?

The development of this story is worth following, if only because this is the first attempt by Russian companies to get out of the US sanctions, which completely paralyze their business. In the end, we will find out how serious sacrifices Deripaska will have to make for this.

Liana Faizova