MOSCOW, (Reuters) – Russian billionaire Viktor Vekselberg quit yesterday as chairman of the world’s largest aluminium producer, UC RUSAL, saying the heavily indebted company was in deep crisis after a long battle with rival oligarch Oleg Deripaska.
Vekselberg’s exit widens a rift with controlling shareholder Deripaska, who had sought to build a Russian metals and mining business on a global scale by merging RUSAL with Norilsk Nickel, the world’s top nickel and palladium miner. RUSAL owns the Aroaima, Guyana-based Bauxite Company of Guyana Inc which has had longstanding industrial relations problems with its union. Arbitration was recently ordered by Guyana’s Minister of Labour into a series of matters.
The energy and metals magnate could now mount a legal challenge to Deripaska’s strategy to keep a stake in Norilsk, which, if sold, would almost wipe out the company’s $11 billion debt burden and enable it to look at other merger opportunities.
“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 with a fortune of $12.4 billion.
Deripaska shot back, accusing Vekselberg of failing to fulfil his chairman’s role by not attending meetings for a year. “In this respect, the decision of Mr Vekselberg to resign as chairman of the board preempted the anticipated consideration of this matter by the Board,” a RUSAL statement said.
RUSAL’s shares were suspended after falling 1.3 percent in Hong Kong on Tuesday.
Deripaska, a theoretical physicist who emerged triumphant from Russia’s aluminium wars of the 1990s, bought a one-quarter stake in Norilsk through RUSAL four years ago but the debt-financed deal quickly turned sour when the global crisis hit. RUSAL was forced into a debt restructuring, killing Deripaska’s dream of a mega-merger. But he has blocked calls by his partners – Vekselberg and billionaire politician Mikhail Prokhorov – to sell the stake back to Norilsk.
DISTANCE
“This escalates the conflict,” said Robert Mantse, metals and mining analyst at Otkritie, a Moscow-based brokerage.
“Although most of the disagreements … are well known, the resignation of Vekselberg shows just how far he and Deripaska now stand apart in the running of the company.”
