Deripaska’s empire under threat as U.S. hits Russia with sanctions – by Eric Reguly (Globe and Mail – April 11, 2018)

Only six months ago, Russian billionaire Oleg Deripaska, said to be President Vladimir Putin’s favourite oligarch, was on top of the world. He had just pulled off a remarkable feat: the listing of his hydropower and aluminum holdings company EN+ Group on the London Stock Exchange, the first Russian company to do so since Russia’s invasion of Crimea in 2014.

Today, he is fighting to save his empire from destruction. On Friday, he and eight of his industrial companies were hit with punishing U.S. sanctions that could last years.

While Mr. Deripaska was only one of seven Russian oligarchs and a dozen of their business to land on the sanctions list, he has the most to lose, given the vast scale of his Russian holdings, which have 150,000 employees.

The drop in the value of his biggest stock exchange companies, EN+ and Hong Kong-listed United Company Rusal, the top maker of aluminum outside of China, was swift and brutal. The shares of both companies fell by more than half of their value on Monday and Tuesday. In total, Mr. Deripaska’s listed companies lost about US$6-billion in value, and the losses could rise as the sanctions, which essentially prevent his companies from dealing in U.S. dollars and with U.S. banks, bite.

As the ruble plunged against the dollar, the impact of the sanctions was being felt across the world. One victim was Glencore, the world’s biggest commodities trader, owner of 8.75 per cent of Rusal’s equity and buyer of billions of dollars of its aluminum under long-term contracts.

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