The Empire of Oleg Deripaska goes to nationalization

An entangled businessman tries to escape under the roar of judicial cannonade, and the ineffective "Rusal" to turn off the state.
21.02.2018
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Billionaires usually do not sue girls from escort agencies, but Oleg Deripaska still filed a lawsuit against Nasty Rybka. Really problems in business finally gave out to a man who once headed the list of Russian rich men? Today, without much difficulty, we can imagine how the former oligarch gives lawyers his last dollar.

Aluminum empire is experiencing more and more troubles, and its creator generates more and more lawsuits, most of which are doomed to failure in advance. The sensation around Deripaska's walks on the yacht pulled new facts. Among other things, we learned that the oligarch decided to sue in London with his longtime business partners Vladimir Potanin and Roman Abramovich. It can be assumed that due to the lawsuit against Nastya Rybka and her "trainer" Alex Leslie (Alexander Kirillov, who was considered to be a resident of Skolkovo before the end of last week), the billionaire wants to preserve the "face" so as not to feel uncomfortable with British arbiters and the public.

What will end the dispute with Abramovich, it is still difficult to say, since we do not know the exact nature of the claims and the arguments of Deripaska. But, if you look at the recent judicial failures of the billionaire, another lost court of surprise will not cause. Recently, Oleg Deripaska sues everyone in a row and for any reason, someone can see in it signs of not only business, but also personal problems of a businessman. Especially when you consider that for many years Deripaska refrained from publicity, and all the courts with his participation are actively covered in the press.

"They cheated and robbed"

In October, the Federal Court in Washington rejected the claim of Oleg Deripaska to the international news agency Associated Press. The plaintiff stated that the agency's material about his collaboration with Paul Manafort (former head of Donald Trump's campaign headquarters) contains libel. The billionaire demanded compensation from journalists in the amount of 75 thousand dollars. However, the court found that his claims were not sufficiently substantiated. "Deripaska does not dispute any significant facts presented in the material of the Associated Press," the arbitrator explained his decision. This is true, since Deripaska as a whole does not hide his past cooperation with Paul Manafort, with whom, incidentally, he also unsuccessfully sues.

Manafort advised the Russian oligarch on some investments. As the Washington Post writes, in 2014, Oleg Deripaska accused the American in court in the Cayman Islands that he took almost 19 million dollars from him, but he did not return the money and could not report for them. In the US, it is believed that later, in 2016, Manafort tried to "pay off" with Deripaska confidential data on the work of Trump's campaign headquarters. But the businessman needs money, and therefore it is not surprising that as of September of last year, according to the American media, the case in the Cayman Islands court was never closed.

At the end of January 2018, it became known that a new lawsuit was being filed against Paul Manafort and his partner Rick Gates, who filed with the federal district court of the United States, Surf Horizon Ltd., owned by Oleg Deripaska. This time we are talking about claims for $ 26 million.

Whom to blame for the failures?

There are claims from Oleg Deripaska and the Bank of Russia, though not judicial, but exclusively oral. The billionaire hit the Central Bank in late January at the economic forum in Davos. Deripaska lamented the lack of economic growth in Russia and the lack of competitiveness of domestic goods. Both circumstances the businessman associated with an overvalued ruble exchange rate and the lack of cheap loans. It is clear that the strengthening of the Russian national currency is unprofitable for oil and gas and metallurgical companies, which receive a dollar revenue from the export of raw materials.

Deripaska, we recall, is the controlling shareholder of En +, which consolidates the energy and metallurgical assets of the aluminum holding company UC Rusal. In autumn 2017, En + held an IPO on the London Stock Exchange. Strengthening the ruble by more than 7% is embedded in the company's development model as the main macroeconomic risk. At the same time, there is a risk of lower prices for aluminum. As analysts of the commodity market Julius Baer say, about 7 million tons of "invisible" aluminum reserves can appear on the market, which appeared as a result of the structural excess of supply in 2007-2013. Predict the time of "exit" to the market of this metal is almost impossible, which makes the risks of price reduction from current levels dominant. To this we should add a decrease in demand for aluminum in China and possible protectionist measures in the US - the second largest consumer of metal.

Whether Oleg Deripaska will sue US President Donald Trump, who threatens to introduce strict quotas and duties for foreign suppliers of steel and aluminum, is now unclear. The claims of the businessman to the British intelligence service MI6 have not yet sounded. The intelligence service questioned the legality of the placement of En + shares on the London Stock Exchange. Scouts believe that the funds raised in this way can be used by Russia to bypass sanctions and develop the military-industrial complex. The story of the November IPO is discussed in the British Parliament and not the fact that Deripaska will manage to hold a secondary offering in London, due to which he has already planned to attract at least $ 1 billion into his business.

Debts pocket pull

The companies of Deripaska need money to pay off huge debts, a significant part of which was formed during the crisis of 2008-2009. Ten years ago, the business of an aluminum magnate could collapse, but the state saved him. In particular, Vnesheconombank then issued $ 4.5 billion to Oleg Deripaska's structures, and two years later a portion of RUSAL's shares was bought by state-owned banks. Following the results of nine months of 2017, the net profit of En + Group (controlled by Eurosibenergo and 48.13% of Rusal) was $ 898 million, and net debt was $ 13 billion.

To repay loans, apparently, and went a significant part of the funds raised in November on the London Stock Exchange. This is confirmed by a statement spread by VTB Bank, presumably in response to MI6 claims: "IPO En + is an absolutely transparent transaction that was implemented in full compliance with all market requirements. Statements that repayment of debts to VTB from the IPO En + allegedly violated the sanctions regime are not based on anything and are absolutely false, as the financial transactions conducted are not subject to sanctions, "the VTB website says.

During the November IPO, Oleg Deripaska's structures were able to attract about $ 1.5 billion in the West, as a result of the secondary placement of securities, En + could get another billion, but the total amount of funds raised will still be insignificant compared to the company's debts. It is likely that this circumstance forces Deripaska to seek money in extravagant ways. So, in 2018, management En + plans to earn 1 billion rubles on the sale of electricity to the ministers crypto-currency. The company offers American and Chinese investors to build mining farms next to powerful power plants in Siberia: in Irkutsk, Bratsk and Ust-Ilimsk. Given that there is still no legal regulation in Russia, and the government and the State Duma have not yet decided on the introduction of a tax for miners, the prospects for the new En + project look vague.

The real state of affairs in the business of Oleg Deripaska is well illustrated by two facts. Firstly, RUSAL did not allocate funds for launching production of equipment for housing and communal services in Tajikistan. Talks about the beginning of joint production with Dushanbe are conducted since the spring of 2015. A few days ago, a local radio station, citing a press center of RUSAL, said that the company had abandoned the deal, finding it unprofitable. Previously, Deripaska's structures refused to participate in the construction of the Rogun HPP in Tajikistan, for which a feasibility study was already carried out.

Of course, in the scope of RUSAL's activities, both projects can be considered of little importance, but then it is worth inquiring about the affairs at the Sayanogorsk Aluminum Plant. In 1994, he became the first stone in the foundation of the business empire of Deripaska, and at the end of 2017 the workers of the SAZ announced violations of labor rights. According to them, the management of the plant conducted a "special assessment of working conditions", on the basis of which workers are usually given additional compensation, guarantees and benefits. But this time they were canceled additional leave, increased the working week by four hours and stopped giving milk for harm.

Workers of the CAS believe that the company decided to save on staff to reduce its losses. But, we can assume that even more to save Oleg Deripaska could on the fees of his lawyers in foreign courts, or the litigation for him became more important than business? If so, then soon we can see the collapse of the aluminum empire, which lasted almost a quarter of a century.

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