The main company of the Russian aluminum holding. United company rusal: structure, management, products. Business development prospects
In the photo - Nathaniel Rothschild - one of the future masters of Russia (according to the approved plans for its privatization)
According to the list of state assets approved by the Ministry of Finance and the Ministry of Economic Development to be sold in 2011-2013, it will include state stakes in Rosneft, Transneft, Sberbank, Sovcomflot, VTB, Rosselkhozbank, Rosagroleasing, Rosspirtprom, OZK, FSK and RusHydro. Historical experience shows that a significant part of the profits of these structures will eventually end up in offshore areas, legalized into gigantic dividends from a dozen “individuals,” English football clubs, yachts, foreign real estate, and mind-boggling “kickbacks” to officials. This is if you sell to “your own”. But something suggests that the time has come for the appearance of “ultimate” buyers in Russia, those for whose sake and through whose efforts the USSR, and before that, the Russian Empire, was actually destroyed.
Which, by the way, does not change the direction of using profits.
Chairman of the Supervisory Board of UC Rusal(RUSAL is the owner of the Russian aluminum industry) Nathaniel Rothschild in an interview with the Vedomosti newspaper, he said a significant phrase: “...I guess you can say that I returned the Rothschilds to Russia.” According to N. Rothschild, he has long been friends with O. Deripaska (the main (?) shareholder of RUSAL) and V. Potanin (co-owner of Norilsk Nickel) and plans to also head the Board of Directors of Norilsk Nickel in Russia*. From the interview it is clear that Nathaniel, despite his relative youth, is a very educated and intelligent person, and if we add unlimited financial opportunities to all his advantages, then apparently you no longer have to worry about the fate of RUSAL and Norilsk Nickel. There was a time when “officer” was synonymous with “Russian patriot.” Today is the time of “Rothschild financial officers”.
*Nornickel is the world's largest producer of nickel (more than 18% of world production), palladium (almost 50%), one of largest producers platinum (about 13%) and copper (about 2.5%). In addition, the company produces cobalt, chromium, rhodium, silver, gold, iridium, ruthenium, as well as selenium, tellurium and sulfur.
A government document dated October 25, 2010 was leaked to the press. N1874-р. According to this Order The Russian state authorizes the sale of the above property to 10 structures, among which are the well-known: CJSC Bank Credit Suisse, LLC Deutsche Bank, LLC Commercial Bank J.P. Morgan Bank International, LLC Merrill Lynch Securities, LLC Morgan Stanley Bank and GOLDMAN SAXS. Among them is the Russian VTB Capital, although even the shares of VTB itself are for some reason instructed to sell Merrill Lynch Securities. Where did the conviction come from that the gentlemen from these companies would act in the interests of the Russian people is unclear? All that remains is to rely once again on the famous “laws of the free market.”
In light of these events, much becomes clear. Why does Russia have its own military-industrial complex when there is a real prospect of joining NATO? Then it is logical to buy ships in France, armored vehicles in Italy, and aircraft in Israel. An increasing share of cars, electronics, clothing, furniture, toys, food, civil aircraft, etc. etc., even nails, rakes and shovels are imported.
Accordingly, with the fact of the disappearance of similar industries in Russia and the emergence of a headache: what to do with those who worked there? Then the demographic problem becomes not a problem at all, but a natural way to relieve the above “headache”.
Why do we need fundamental education for everyone in Russia, when in the future we will have nothing left except the raw materials industries? The sacramental question on the Unified State Exam: “Peter I is: 1. Tsar, 2. Cosmonaut, 3. Hockey player” - is unacceptable for a future designer, engineer, scientist, but quite acceptable for a future handyman, waiter, receptionist.
During Gorbachev’s time, the population was brainwashed with “perestroika”, “glasnost”, “new thinking”, and at that time “agents of influence” like Yakovlev, Gorbachev’s main ideologist adviser, were engaged in dismantling the USSR. Today we are told about nanotechnology, Skolkovo, “modernization”, “reboot” and at the same time the main ideologist - Advisor to the President of the Russian Federation D.A. Mr. Yurgens calls Medvedev the main opponent of the implementation of these wonderful plans, the Russian people, i.e. 80% of the Russian population.
Pre-sale preparations for Russia are being completed. Gradually, everything unnecessary is removed, everything useful remains: territory, subsoil, water, black soil, “Unified State Examination” workforce. With Khodorkovsky’s release from prison, through any “independent court” in Strasbourg, London or somewhere in New York, the issue of Russian oil. In case anyone has forgotten, according to experts, Yukos obtained licenses for 70% of the Russian oil reserves, and the elder Bush came to Russia at the same time and reported that the American Exxon had decided to buy this “most transparent company in Russia.” 15% controlled by TNK-BP (British Petroleum), plus 70% by Exxon - a total of 85%. “This is how it turns out to be a squiggle.” ( For some reason, only Gazprom is not touched yet. Maybe they agreed on this or left it “for dessert”?)…
A shareholder conflict has arisen in Rusal. The formal reason was the company's contract with Glencore (one of RusAl's shareholders), allowing the latter to sell more than half of Rusal's aluminum. After these events, Rusal's shareholder is SUAL Partners (owned Viktor Vekselberg and Leonard Blavatnik - 15.8% shares), imposed on this decision veto because this contract was offered without holding a competition among potential traders. However, Oleg Deripaska , the holder of 47.41% of Rusal shares, ignored the veto, and the contract was approved. As a result, SUAL Partners has already filed claims against Deripaska. The conflict has not yet gone beyond the company's borders; within the framework of the shareholders' agreement, the situation is expected to be resolved within a month using the corporate procedure for resolving controversial issues. The deadline expires on the twentieth of December. If this fails, then perhaps the shareholder will connect arbitration court. If the conflict between Rusal shareholders comes to court, then this case may subsequently be considered by international commercial arbitration courts in Europe. The review process typically takes approximately two years. Meanwhile, the views of shareholders do not converge on many points. “In my opinion, the conflict between Viktor Vekselberg and Oleg Deripaska is very serious and clearly goes beyond just this matter about the agreement with Glencore,” says Investcafe analyst Pavel Emelyantsev. “The fact is that even after Vekselberg’s assets were merged into the united company Rusal, Oleg Deripaska, who owns 47.41% of its shares, many times did not take into account the opinion of his minority shareholders. In particular, the constant refusal of the owner of Basic Element to sell Rusal's 25% stake in Norilsk Nickel led to a serious conflict. So, back in October, the management of MMC offered to buy out this stake for $9 billion, but was refused by Deripaska, despite the general agreement of Vekselberg, Blavatnik and Prokhorov, who together own 32.8% of Rusal. In February, the offer price was raised to $12.8 billion for a 20% stake. And again a refusal, contrary to the wishes of minority shareholders. Deripaska simply ignores them, which, naturally, cannot evoke positive emotions in Viktor Vekselberg. In addition, we must not forget about the latter’s interest in high prices for electricity for a number Ural factories Rusal, which, in general, directly contradicts the interests of Deripaska. Like any other internal corporate conflict, this one can only lead to a decrease in the company’s capitalization. This usually occurs due to the distraction of majority shareholders from effective management enterprise and often leads to the use of the company's financial resources in one form or another to pursue its own interests. For example, we can cite the latest buyout of Norilsk Nickel, in which the MMC money was actually used to increase the share of majority shareholders and receive them monetary compensation without sufficient financial need for this on the part of Norilsk Nickel itself. Moreover, legal proceedings could potentially lead to economic damage for the aluminum giant,” the expert comments.
How did it happen that Russian company turned out to be squeezed out in favor of the United States?
The story with Deripaska has developed. The US Treasury Department's Office of Foreign Assets Control (OFAC) announced the lifting of sanctions imposed in April 2018 on its assets in 30 days. At the same time, emphasizing that we're talking about only about the En+ group, Eurosibenergo and Rusal, while the Russian oligarch himself remains under sanctions.
There are two fundamentally different views on what is happening. One is generally more negative. The other one is rather positive. Both are fairly well supported by compelling arguments. The truth, as usual, lies somewhere in between.
The creator of the corporation has lost control over it. Deripaska agreed to OFAC's demands to reduce his stake from 70 to 44.95%. Moreover, only 35% of the shares become voting, the rest are automatically added to the winning decision in the vote. And most importantly, the oligarch is deprived of the right to receive dividends from the mentioned companies. In turn, the share of the state Russian bank VTB in the company is significantly expanding.
How this will all work in the end is not yet very clear. The further actions of Deripaska himself, whose main asset in less than a year has turned into a suitcase without a handle, also remain unclear. However, the most pressing question is the one that appears in the comments to articles on this topic.
There was a company with Russian leadership, albeit private, and then eight of the twelve board members were American. Moreover, its holy of holies - internal documents, including transcripts of meetings of these same directors, will be necessarily transferred to OFAC. How could this even happen?
The answer to this, unfortunately, is unpleasant. Paradoxically, we ourselves are to blame for what happened. Everything, both the people, as the source of power and the bearer of specific views on “justice,” and the state, which is always its reflection. Capitalism and private property acted only as catalysts here.
It is usually fashionable to talk about the responsibilities of the state to manage and control business. Most often in the form: the state ordered - the business complied. But few people think about what it all looks like from the other side of the barricade. The suddenness and virtually unlimited restrictions on the state’s right to take away whatever it deems necessary is a threat to any business. The bigger the bigger created by business cash flow. People are usually outraged when the government increases taxes. Business reacts with the only difference that it seeks to protect income legally.
In addition to the general theory, there is also an objective reality when state power different ways used for the purposes of banal raiding. Now the country has more or less returned to the legal framework; in the dashing 90s, the risk of a “state attack” initiated by competitors for large businesses was one of the highest.
The only truly effective protection in those days was considered to be offshorization, that is, the transfer of property rights outside of Russian jurisdiction. And not so much the property itself, such as factories or fields, but the structure of generating financial flows. According to the then fashionable Western liberal views, it was believed that politically motivated threats existed only in Russia, while the right to private property in the Western world was absolutely sacred. These are the rules Deripaska played by.
By 2010, he was proudly boasting of successfully turning his corporation into a dual offshorer. US Rusal's assets were cunningly distributed between the island of Jersey and Switzerland. By the way, the implementation of this scheme was greatly facilitated by the specifics of the aluminum business.
Back in Soviet times, we received more than 60% of the alumina needed for production from abroad. Mainly from African countries. At the same time, until approximately 2014, up to 2/3 of finished products were also sold abroad. The domestic market began to develop only after the transition to the bottling of low-alcohol products and all kinds of sweet soda with energy drinks; before that there was nowhere to develop domestic sales.
The natural desire to provide itself with the cheapest possible raw materials inevitably pushed business to acquire deposits, and then processing facilities abroad into semi-finished products. Which quickly expanded the trend to the purchase of competing foreign aluminum smelters.
Two plus two makes four. Deripaska managed, as it seemed to him, to create a structure that was absolutely protected from any attempt at pressure from the Russian state. Well, as a bonus, by 2006, reduce the total effective tax rate on corporate profits from 35-40 (as it should have been then according to the tax laws of the Russian Federation) to 10%.
Later, after expanding the structure of the corporation and switching to the US Rusal business scheme, the figure grew somewhat, reaching 13%; the world's largest metallurgical vertically integrated holding turned out to be too huge. But even in this form, with a total profit for 2016 of $1.179 billion, tax savings were significant, at least 230 million “evergreens” per year.
It seemed to the author of this scheme that he was completely protected from all politically motivated misfortunes. However, guys in expensive business suits from the American Department of the Treasury easily proved that a business that does not have reliable government cover quickly turns into a prize for free hunting.
Firstly, if something cannot be done with the company itself, then you can arrange a “happy life” for its counterparties. Especially when a good half of them in the area of American jurisdiction laid a lot of money eggs. With a graceful flick of the wrist, OFAC instantly took everything out of the game. foreign enterprises holding, falling short of the sales scheme within the Russian Federation, but it provided less than 35% of the corporation's cash flow.
Secondly, any big business is always closely related to the use of operational loans. They were taken from foreign banks, large ones at that, capable of offering both the amounts of the required volume and rates of a more interesting size. US sanctions turned off the financial taps, thereby paralyzing economic activity.
This is where it turned out that quickly transferring and re-registering assets is easy only while you own a small candle factory. A mastodon the size of Rusal is, of course, financially strong, you can’t overwhelm it with one shot, but at the same time it’s too slow for instant transformation. Private property, of course, is sacred, but in a business of this scale, even a simple temporary transfer of shares for temporary use or a bank pledge, and even more so a sale or change of jurisdiction, already require mandatory permitting and approval procedures. Without passing which the transaction simply cannot take place.
This is where the Americans caught Deripaska. By building “double offshore protection” from the Russian state, he actually entered the zone of American jurisdiction himself. Moreover, he found himself there in the status of a powerless emigrant, thereby turning into a desirable target for capture. Who said that only the Russian state can act in a politically motivated manner? Or who promised that, say, the Rockefellers cannot use the US state mechanism for raiding purposes? Nothing personal just business. Either you transfer your business to our people, or in a couple of months your money will run out and creditors will take away your assets for nothing.
The moral of this story is as simple as a perpendicular. Without a state roof, no business, even a mastodonically huge one, can exist in the modern world. However, it can only be cooked inside Russian borders he can't either. Geographically, Russia is certainly large, but economically it is only eleventh in the world, 2.29 times behind Germany, 3 times behind Japan, 7.6 times behind China, and 12.28 times behind the USA.
If we want to compete on an equal footing with our competitors, we inevitably need to expand into international markets. Therefore, we ourselves must stop whining about the horror of capital flight and stop looking at business through the eyes of an ever-hungry wolf. The corporate world of business is somewhat more complex than primitive populist schemes.
For the rest, we can only thank the American Treasury. I remember that Russian President Vladimir Putin warned the Russian oligarchs about exactly this scenario back in 2008 - “you will be tortured to swallow dust,” but then few of them listened to his words. The American whip turned out to be more convincing. Now they are running, swallowing...
Alexander Zapolskis
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Senior management of Rusala, including CEO Alexandra Buriko, resigns due to US sanctions. The statement was released to the Hong Kong Stock Exchange. This was reported on May 24, 2018 by the company’s press service.
Buriko resigned from her post on May 23. The duties of general director will be performed by 52-year-old Evgeny Nikitin. As of June 28, members of the board of directors Vladislav Solovyov, Siegfried Wolf, Maxim Sokov, Dmitry Afanasyev, Gulzhan Moldazhanova, Olga Mashkovskaya and Ekaterina Nikitina will leave their posts.
The statement said that since April 2018, the company, acting in the interests of its creditors, shareholders and partners, has been in ongoing discussions with the authorities to find a way to ease sanctions that were imposed by the Office of Foreign Assets Control. It is noted that the sanctions will have a negative impact on metal production and sales, which could lead to a reduction in the group’s EBITDA and cash flows.
Previously, on April 6, the US Treasury introduced new sanctions against Russian individuals and legal entities, including several domestic billionaires and heads of corporations from the circle of Russian President Vladimir Putin - Oleg Deripaska, Viktor Vekselberg, Igor Rotenberg, Kirill Shamalov, Alexey Miller. The list included 26 people and 15 companies. The Ministry of Finance explained the new sanctions by the situation in Ukraine and Syria, as well as Russia’s attempts to undermine “Western democracy.”
The announcement of the sanctions brought down the stock prices of Deripaska-controlled Rusal, one of the world's largest aluminum producers, and called into question the company's performance of contracts and debt obligations. Later, the United States reported that restrictions on cooperation with Rusal under the sanctions could be lifted if the businessman renounces control in the company.
A few days later, the director of strategic projects at Renova, Maxim Goldman, and Executive Director ONEXIMA Daniel Wolf. Before them, the CEO of UC Rusal left the board of directors Glencore Ivan Glasenberg and independent director Philip Lader.
Later, on May 18, Oleg Deripaska resigned from the board of directors of En+, the largest shareholder of UC Rusal. En+ said in a statement that the company's board of directors unanimously accepted Chairman Gregory Barker's Barker Plan to lift sanctions on En+ and its subsidiaries. The "Barker Plan" aims to reduce Deripaska's stake below 50% and end his influence on the board by appointing new members.
A month after the introduction of sanctions, Rusal assessed their impact on its business as negative. The day before it became known that VTB Bank stopped lending to Oleg Deripaska and the companies controlled by him after they were included in the US sanctions list.
... read more >“When a madness called sanctions is imposed on the financial market, it feels like each country is competing with each other to see who can come up with the stupidest version and outdo it,” noted Mr. Tosunyan . - This sanctions policy completely knocks us out of the logical thinking algorithm. Then this is met with counter-sanctions, a desire to tighten the screws, and some other consequences. This affects the oil market, the oil market affects the financial market. By inertia, people are ready to invest somewhere interest-free, withdrawing funds from their country, although this is illogical, because in our country you can invest, yes, it’s difficult, but the profitability is different.”
The exodus from Russia is underway today high level. Washington seems to have achieved its goals by introducing economic sanctions against our state. First Deputy Prime Minister, Minister of Finance Anton Siluanov revealed to journalists how the Russian Ministry of Finance “bows” to Washington. A striking example of this policy of protecting the Russian oligarchy, rather than assets, was the Rusal company.
Mr. Siluanov referred to the successful experience of removing En+, Rusal and Eurosibenergo from sanctions. It will be possible to work with the Gas Group using a similar scheme. Negotiations with the US Department of the Treasury for Foreign Assets Control are already underway.
It was possible to achieve the favor of the American Ministry of Finance in relation to the companies of the oligarch Deripaska thanks to the implementation of the so-called. "Barker Plan". Gregory Barker is a former UK energy minister who currently chairs the board of directors of En+. He proposed a scheme for transferring control over Deripaska’s assets in En+, Rusal and Eurosibenergo to VTB, Glencore and one charitable foundation.
Gregory Barker. Photo: www.globallookpress.com
On the board of directors of En+, Deripaska will be able to recommend only 4 members out of 12, another 6 members must be citizens of the United States or Britain. In addition, the composition of the boards of directors of En+ and Rusal must be agreed upon with the United States Treasury. The most important point of the “Barker Plan” is the denial of En+ and its subsidiaries the opportunity to register in Russian jurisdiction without the approval of the board of directors and the US Treasury Department.
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According to experts , from now on, the Americans will be able to dictate their terms not only to Rusal, but also to Norilsk Nickel, and, if necessary, will close down “ineffective” ones Russian enterprises or massive staff reductions. Analysts agree that as a result of the so-called. reforms, the share of foreign capital in Russian industry as a whole is about 70%.
Experts note that Russia lives by the rules of the WTO and the IMF, and not by its own economic laws. She found herself in the trap of global capital, which is using anti-Russian sanctions to gain control over leading sectors of the economy.
President of the Center for System Forecasting Dmitry Mityaev commented on this precedent to Constantinople.
Dmitry Mityaev. Photo: TV channel “Tsargrad”
Dmitry Mityaev. The point is that, in the conditions of the redistribution of global markets, which is happening one way or another, and the severe drawdown of the world economy, which is also happening, we should take the roots for ourselves and give the tops to us. As this usually happens - privatization of profits, socialization of losses. In this case, on a global scale.
Rusal is a well-structured company with large assets not only in Russia, but throughout the world. But she is very easy to attack. It was enough to prohibit companies from transporting cargo for Rusal under the threat of secondary sanctions, and everything began to fall apart. That is, the Americans, in their opinion, have very successfully developed a technology that can be scaled to other companies, to other markets, and not only Russian ones.
We see that we are talking about access to these global markets, which Americans consider theirs, global jurisdiction, which they also consider theirs. Therefore, in this particular case, it was more likely a redistribution between the Americans and the British, because before that Rusal and this entire group were largely controlled by the British. They agreed a long time ago.
We know that the younger Rothschild was on the board of directors of this company, and he was not very friendly with Deripaska. But that's not the point. The point is that there is no place for everyone on the global market. Markets stop bubbling, demand falls, prices will actually decline, even for metals.
It was a golden time, the last two years, when global financiers, global raw material producers cashed in absolutely unimaginable excess profits, we saw this in our companies, which simply did not know how to expel it as quickly as possible. The margin was 40-50%. And now it will all collapse.
Russia began to be put under preventive pressure. The point is precisely to take into this notorious blind trust of the US Treasury everything that the client is ready to give. And they may succeed, judging by the statements of our Minister of Finance, who interacts constructively with the West, without even discussing it.
There was a draft law in the State Duma on responsibility for the implementation of these hostile and completely illegal sanctions, which, not to mention Russian, have no correlation with any legislation. Except American. Because American legislation clearly instructs them to do whatever they want, and everyone else to carry out this task. "Obey or die." Simple principle. Such responsibility is needed for compliance with sanctions.
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We must understand that changes will not only occur for this company. This is not just about Rusal. There is En+, a holding company, and Eurosibenergo, directly production structure, which manages the largest Siberian hydroelectric power stations. If the trust decides that these capacities are unnecessary and wants to reduce production at these plants, and it has the authority to make such a decision, we seem to agree with this. That is, our Ministry of Finance agrees with this.
Some kind of “Stockholm syndrome” - the Ministry of Finance frantically buys currency, including dollars, and puts them in Western deposit accounts in order to later transfer them to the National Welfare Fund, but legally these will still be funds from American banks. Although this could be directly in our Central Bank, or in the US federal treasury.
The Ministry of Finance is hostage, it can and cannot, in such a situation it does not have much room for maneuver and protection of national interests. Because it follows the “borrow and save” policy, place in rubles here at 10% per annum, and there the purchased currency at 2% per annum. This is a conscious, long-term policy, and no one wants to answer for it either.
Anton Siluanov. Photo: www.globallookpress.com
All our leading officials are included in the sanctions lists. Especially the power block. But Siluanov is not there. And Nabiullina is not there. However, they are all on the waiting list. Maybe, except for Nabiullina and Gref. The Ministry of Finance will still have to deal with this situation. Now Mr. Zadornov has stated that, according to his data, 1-2 of the largest state-owned banks will be subject to these sanctions. Will they be there in April-May? I think sooner rather than later.
We must understand the tension of the situation overseas. Trump doesn't have much time for internal squabbles. Now he has Powell under fire. He is already dissatisfied with Mnuchin, the Minister of Finance; someone must be responsible for the collapse of the stock market and other things. In fact, the ax of special counsel Mueller’s report, which seems to be released in February, hangs over Trump. Until that time, he must come up with something so that he is not appointed responsible.
A very tough fight is going on. And since from January 1, the majority in the House of Representatives passes to the Democrats, they will inflate this report as much as possible and, judging by the logic, they will start an impeachment procedure, which, most likely, will lead to nothing. But, nevertheless, Trump faces a similar situation.
In my opinion, the start of 2019 will be very tough. For us, these are, first of all, commodity prices. Oil is already $50. By the way, an interesting episode. Our notorious Moscow Exchange allows a small number of its players to enrich themselves. In principle, the same thing happened with the ruble in December 2014. No one answered for this either. Then, however, the scale was much larger, the ruble jumped from 40 to 60, and then to 80 in an instant. Now Ms. Nabiullina said that her stress tests showed that banks are ready for a new devaluation following the example of 2014.
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This statement itself, it seems to me, is incorrect and indicates that the guidelines of our Central Bank are not at all what they should be according to the Constitution. With talk that if there is a devaluation, we are not responsible for it, but the banks are ready for it, inflation will immediately jump. What is the Central Bank supposedly responsible for?
Based on the previous crisis, the assessments are all there. At that time, Rosstat was more or less normal, and the Ministry of Economy made adequate assessments. So, the contribution of devaluation to inflation in 2015-16 ranged from 60% to 80%.
