RUSAL, once the world's largest aluminum producer, is a vertically integrated company. Rusal's production chain includes deposits of bauxite and nepheline ores, alumina enterprises, aluminum smelters, foundries, foil rolling enterprises, production of automobile wheels and packaging materials, as well as electricity generating capacities.
To get a better idea of the company’s activities, you should understand a little about how aluminum is produced. Metallic aluminum is produced in three stages:
About 95% of all alumina is obtained from bauxite ores. Bauxite ore is an aluminum ore consisting of aluminum hydroxides (alumina), iron and silicon oxides. The alumina content in industrial bauxite ranges from 40% to 60% and higher. Externally, bauxite is similar to clay, but in its physical and chemical properties it has nothing in common with it.
Today, the main suppliers of bauxite are: Australia, Guinea, Guyana, Jamaica, Suriname, Brazil, Central Urals.
After the mine, the bauxite ore goes to an alumina refinery, where it is dried and ground, cleaned of flint using steam, and all aluminum oxide is separated from iron oxide and other foreign substances using alkali. The output is alumina or aluminum oxide (Al2O3). Alumina appears as a white powder.
Next, the alumina goes to the aluminum smelter, where it is poured into an electrolyzer. The electrolyzer consists of a bath containing a cryolite-based melt, to which an electric current is supplied. The bottom of the bath serves as a cathode; liquid aluminum is heavier than molten cryolite, so it is collected on a coal base, from where it is periodically pumped out. Anodes are immersed in the electrolyte on top, which burn in an atmosphere of oxygen released from aluminum oxide, releasing carbon monoxide (CO) or carbon dioxide (CO2). Thus, aluminum (Al) is obtained from alumina (Al2O3).
The aluminum industry is one of the most energy-intensive industries, therefore the most important condition its development is the availability of powerful sources of cheap electricity. To provide the Bratsk aluminum smelters with electricity, the Bratsk Hydroelectric Power Station was built, and for the Sayanogorsk, Khakass, Krasnoyarsk, and Novokuznetsk, the largest hydroelectric power station on the continent was built - the Sayano-Shushenskaya Hydroelectric Power Station.
Due to the multi-stage technological process aluminum production, Rusal acquired many companies around the world.
Due to the high energy intensity of the industry, almost all aluminum smelters are located in Russia near large hydroelectric power stations.
Alumina refineries are scattered throughout the world. Rusal is fully self-sufficient in alumina.
Bauxite mines are also located throughout the world. The raw material base of bauxite is sufficient to ensure 100 years of Rusal's activity.
Rusal also owns factories for the production of cryolite, cathodes, food foil and car wheels.
Having studied the property of Rusal, you can move on to analyzing the owners of the company.
Control over Rusal belongs to EN+ (65.2% of which belongs to Deripaska), 26.5% belongs to Vekselberg and his partners through Sual Partners, almost 17% is in free float, 8.75 is owned by Glencore, which wants to convert its stake into EN+ after the sanctions are lifted.
Actually, due to the fact that Rusal controls Deripaska, sanctions were imposed on the company. The company could actually be cut off from Western markets. If the sanctions came into force, Rusal would no longer be able to make payments in US dollars - any such payments are carried out through an American correspondent bank and must be blocked by it. More than 60% of the company's payments are made in dollars - aluminum is traded mainly in this currency. Also, everyone who entered into contracts with Rusal could themselves be subject to sanctions. BUT sanctions have not yet been introduced, they are constantly being postponed, and recently the US Treasury Department allowed new transactions with Rusal, even if after October 23 the sanctions are finally approved, if the counterparties have already entered into similar agreements before.
Initially, the conditions for lifting sanctions from the company were that Deripaska loses control over EN+ (lowers his share below 50%), respectively, over Rusal. In August, the US Treasury set a new condition for Oleg Deripaska - to completely leave Rusal and En+ in order to lift sanctions on these companies.
This whole topic with sanctions is more rhetorical, because... There are too many unknowns. Let's move on to specific indicators of the company and the industry as a whole.
Both demand and consumption of aluminum have increased by 50% over 8 years.
At the same time, prices decreased by 10%. The price of aluminum, like the prices of other industrial metals, is completely dependent on the Chinese economy. China remains the main and practically the only driver of world production - 57% and consumption - 54.4% of aluminum. The trade war between the United States and China will not have the best impact on further prospects for rising aluminum prices. But as in the case of steel, prices may be supported by the fact that China is curtailing inefficient and environmentally unfriendly capacity.
As with nickel, demand for aluminum is expected to increase due to greater use of the metal in modern automotive manufacturing. Also, do not forget, as in the case of VSMPO-AVISMA, that the peak of aircraft production for Boeing and Airbus will be in 2021. This will be followed by the re-equipment of factories for new types of aircraft. According to the forecast, the recession will end by 2023. after which capacity utilization will resume with renewed vigor.
Another point of growth should be construction. In construction, this metal has gained a very strong position: not a single skyscraper, not a single metal-frame building can do without it, and it is already difficult to imagine an ordinary residential building without aluminum elements.
The next largest sectors of use are energy. Aluminum is indispensable in the production of power lines and telephone wires, radars, capacitors, and so on.
In the overall consumption structure, foil and packaging occupy 15%. The main positions are occupied by food foil and aluminum drink cans. More than 200 billion beverage cans are produced annually in the world, and there is nothing more convenient and high-quality than packaging from aluminum foil, humanity has not yet come up with.
Let's move on to Rusal himself.
Over the past 7 years, the company has used almost all the money it earns to pay off its huge debt. The company uses some funds for the not very successful construction of new plants (Bogucharsky and Taishetsky plant (both projects are frozen)), as well as for the takeover of companies (KiK is the largest manufacturer of wheel rims in Russia). The debt arose as a result of the purchase of a 27% stake in MMC Norilsk Nickel in 2008.
In 7 years, the company was able to repay $3.5 billion; to achieve a comfortable level of Debt/EBITDA, it will take at least another 7 years.
Dividends from Norilsk Nickel fully cover interest payments on the loan. With a fairly large debt load, the company is slowly investing in its development, with depreciation at $500 million, in 2017, the purchase of fixed assets amounted to $820 million. Whether Rusal will invest in construction this year is a big question. It is already known that construction of the Taishet plant jointly with RusHydro has been frozen until better times.
In 2017, Rusal sold 3.7 million tons of aluminum. With aluminum prices rising by 20%, EBITDA increased by 42% from $1.5 billion to $2.1 billion. Dividends from Norilsk Nickel amounted to $533 million.
According to Rusal's forecast, there should be a shortage in the primary aluminum market in the coming years.
The negative balance was covered by warehouse stocks, but they are not unlimited, so there is a chance that we will soon see a new increase in aluminum prices.
Whether the sanctions are lifted from the company or not, Deripaska will sell his stake, and who will be able to buy it, and if he doesn’t sell it, then what next, until the answers to these questions are received, the purchase of Rusal remains a speculative exercise. In addition, we should not forget that the company has quite a lot of debt, and therefore there is a risk that if the market situation worsens, it will have to sell Norilsk Nickel shares for next to nothing. And even if the situation is good, the debt will be repaid for another 7 years, which means you can forget about paying decent dividends.
On the other hand, an increase in demand for aluminum and the emergence of a shortage in the market should contribute to an increase in prices, and with an increase in prices, EBITDA increases multiple times. In addition, at the moment there is a situation where a share in norilsk Nickel is worth more than Rusal itself. When selling a stake in MMC, Rusal's debt is completely repaid.
The answer to the question “Who is to blame?” -
The world's largest producer of aluminum and alumina, created in March 2007 as a result of the merger of the Rusal Company, which ranked third in the world in aluminum production, the SUAL Group, one of the ten largest global aluminum producers, and the alumina assets of the Swiss company Glencore.
The company includes enterprises for the extraction of bauxite and nepheline ore, the production of alumina, aluminum and alloys, foil and packaging materials based on it, as well as energy assets. More than 75 thousand people work at the company's enterprises on five continents in 19 countries.
Development issues information technology at Rusal factories there is a separate one dedicated.
After the transaction is completed, they will own 26.5% of Rusal shares, that is, a blocking stake, Vedomosti writes.
The transaction amount is not disclosed.
Over the years, Mikhail Prokhorov owned from 14% to 17% of Rusal shares. In 2017, he sold Vekselberg and Blavatnik a 7% stake.
In August 2017, Zonoville Investments Limited bought a 7 percent stake in UC Rusal, the world's largest aluminum producer, from Mikhail Prokhorov's structures. The beneficiaries of Zonoville Investments Limited are several shareholders of another large minority shareholder of the aluminum holding - SUAL Partners, including the main owner of Renova, Viktor Vekselberg. It is Vekselberg who is named as the buyer’s guarantor in the transaction announcement, while Mikhail Prokhorov is the seller’s guarantor.
The value of a 7 percent stake in UC Rusal is determined at $503.885 million. At the same time, at the time of publication of information about the transaction, 7 percent of UC Rusal shares were worth $714 million on the Hong Kong Stock Exchange. The average cost of the package over the past six months is $482 million.
The search for buyers for Mikhail Prokhorov’s Onexim stake in UC Rusal (17.02 percent) began in the summer of 2016. During negotiations with SUAL Partners, the possibility of purchasing a 12 percent stake for $700 million was discussed. But while negotiations were ongoing, the situation changed: in the summer of 2016, UC Rusal’s quotes were near historical lows, but over the year the company’s capitalization almost doubled and today stands at $10.3 billion. Onexim was not ready to sell securities at last year's price. As a result, 3.32 percent of UC Rusal were sold on the stock exchange in February for $240 million. After the current deal, Onexim's share in the aluminum holding will be reduced to 6.7 percent.
In October 2016, it became known that Mikhail Prokhorov’s Onexim would sell 12% of UC Rusal for $700 million. The stake was bought by the company’s co-owner, Sual Partners of Viktor Vekselberg and Leonard Blavatnik.
Onexim began looking for a buyer for a stake in UC Rusal after the FSB conducted searches at the company's head office in early June 2016. Later, the FSB reported that this was connected with the Tavrichesky Bank, which was sanitizing the MFC controlled by Onexim. But sources close to the owner of Onexim, Prokhorov, and federal officials said that the searches were an act of intimidation: the Kremlin was dissatisfied with the editorial policy of the media holding RBC, owned by Onexim. After this, Vedomosti sources reported that Prokhorov was going to sell Russian assets. It is incorrect to draw a conclusion about the “sale of all assets in Russia” based on the fact of negotiations. “We have not made any decisions on this topic” - this is how Onexim CEO Dmitry Razumov responded to this information. Nevertheless, in July 2016, Onexim sold a 20% stake in Uralkali to Belarusian businessman Dmitry Lobyak. The transaction amount was not disclosed.
“We want to increase our stake [in UC Rusal]. It's reasonable, it's natural. We have been in this company from the very beginning. We believe in this company. We see its great potential,” Vekselberg told the Rossiya 24 TV channel on October 26. He added that the deal will be closed soon.
For approximately 12% of the existing 17% shares of UC Rusal, Onexim will receive about $700 million, three sources close to different parties to the impending transaction said. Thus, the share of Sual Partners will increase from 15.8 to 27.8%. En+ of Oleg Deripaska at this time controls 48.13% of UC Rusal.
The deal could be closed by the end of November, says a source close to one of the shareholders of UC Rusal. Funds for the purchase of the package will be provided by VTB and Sberbank, but the size of the loan has not yet been determined, he adds. Earlier, Vedomosti's interlocutors said that Sberbank had already approved $350 million in financing for Sual Partners. But it is not a fact that Sberbank will eventually participate in the deal, says a source close to Sberbank. Until recently, the Onexim stake was pledged under a repo transaction with VTB, but later the bank announced that the size of the stake would be reduced from 17.02 to 13.16%.
The price of $700 million for 12% implies a premium to the current market price of 17.3%. If aluminum, which is now trading around $1,600 per ton (about 6% below annual highs), begins to rise in price, then UC Rusal may cost more and then we cannot say that this is a very good premium, says the manager of an investment fund that invests, among other things, in papers of metallurgical companies.
But so far there are no special prerequisites for an increase in metal prices - there is still a surplus in China, the source notes.
At the same time, Onexim will manage to receive $42.55 million in dividends from UC Rusal - the second in almost six years. On October 25, 2016, creditors allowed UC Rusal to pay $250 million in interim dividends. The register closed on October 3. Payments are scheduled to be completed on October 31. Onexim received the same amount – $42.55 million – from UC Rusal in 2015.
Sual Partners buys 12% of UC Rusal to maintain the shareholder agreement. According to it, the share of Onexim should not decrease less than 5%. In addition, such a package allows him to nominate one candidate to the board of directors of Norilsk Nickel, whom UC Rusal will be obliged to nominate. Until the summer of 2010, such a candidate was Razumov. Afterwards, Onexim representatives were not elected to the council. In addition, the purchase of the entire stake would lead Sual Partners to the need to make an offer to the remaining shareholders of UC Rusal. If you purchase 12%, this will not be required.
In March 2012, Viktor Vekselberg resigned as chairman and member of the board of directors of Rusal due to disagreements with the company's management.
The sole owner and ultimate beneficiary of the Rusal aluminum concern and management company « Basic Element"- entrepreneur Oleg Deripaska. Under pressure from international investors, Russia's largest aluminum producer has revealed its ownership structure.
The European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC) have agreed to provide loans to Rusal and Sual in the amount of $150 million for the implementation of the Komi Aluminum project. The total cost of the project is estimated at $1.2 billion.
The decision was made after Oleg Deripaska admitted that he is the sole owner of the Rusal and Basic Element companies.
Earlier, IFC and the EBRD decided to provide financing to Sual for the expansion of the Sredne-Timanskoye field in Komi. But in April 2005, Sual transferred 50% of the project to Rusal. After this, the IFC and the EBRD suspended the deal because “ new structure the partnership's property was a material change to the original loan agreement." The main condition for providing a loan for the Komi Aluminum project was the streamlining of Rusal's ownership structure. The aluminum concern agreed to this requirement.
On Tuesday, investment institutions announced that the decision to finance an aluminum project in Komi had been made. IFC and EBRD are providing $75 million each for a period of 9 years. The funds will be used to increase bauxite production at the Sredne-Timan deposit and to build an alumina refinery in the Sosnogorsk region. The EBRD and IFC are also considering financing the next stages of the project.
“This decision is an important step towards a final agreement on the transfer of funds. It is based on full disclosure of ownership by the owner of Rusal and Basic Element, Oleg Deripaska, and involves his acceptance of additional clearly defined commitments to increased transparency, good corporate governance and high business standards relating to Rusal and Basic Element. Compliance with these obligations is enshrined in legal documents with the EBRD and IFC,” the EBRD and IFC said.
In a joint press release, the EBRD and IFC call Oleg Deripaska the owner of Rusal and Basic Element.
From a legal point of view, the use of the term “owner” means that Oleg Deripaska owns 100% of the shares of these companies - he is the ultimate beneficiary of the aluminum concern. “The point is that Oleg Deripaska is the sole owner of these assets. Perhaps he owns them not directly, but through certain structures, but everything belongs to him,” explained Valery Tutykhin, partner at the law firm John Tyner and Partners.
“The press release was compiled in consultation with lawyers, so all terms used are extremely accurate. The document does not say that Deripaska controls Rusal and Basel, but rather the term “owner” is used. “Rusal” and “Basic Element” belong to Oleg Deripaska,” a source at the EBRD told Gazeta.Ru.
In addition to disclosing information about the ultimate owner, Rusal has adopted an 18-month plan that includes “significant disclosure of corporate ownership, publication of financial information and specific steps to improve corporate governance.” In particular, it is planned to introduce three independent directors into the company. Independent directors, whose appointment is subject to the approval of IFC and the EBRD, will chair and constitute a majority of the subcommittees overseeing the audit, corporate governance and other corporate issues. "Basel", in turn, will disclose information about the holding's investments and approve a code of ethics.
The management of Rusal positively greeted the decision of the EBRD and IFC. “The participation of two of the world’s leading financial institutions in this project will allow us to solve one of the most important strategic tasks of the Russian aluminum industry - expanding our own raw material base,” said the company’s general director Alexander Bulygin. “I am confident that our first experience of cooperation with the EBRD and IFC will create a good basis for partnership on a number of new projects both in Russia and abroad,” the top manager added.
The experts interviewed were not surprised that Oleg Deripaska is the sole owner of Rusal and Basic Element. Disclosure of information about the owner will have a positive effect on the development of companies, analysts are sure.
“Even when Millhouse sold a blocking stake in Rusal in 2003, everyone believed that the buyer was most likely Oleg Deripaska. However, no official confirmation has been published, says Stanislav Kleshchev from Financial Bridge Investment Company. – Disclosure of information about owners will be a breakthrough for companies.
After all, “Basel” has previously had problems attracting loans precisely because of the lack of clarity about who is its owner.” According to Brokercreditservice analyst Vyacheslav Zhabin, the fact that Oleg Deripaska is the sole owner of Rusal will not prevent the company from placing shares on a Western stock exchange (Rusal's IPO, according to unofficial information, is scheduled for 2006–2007). “I see no reason for concern in this,” the expert notes. – Now Rusal will be able to optimize its ownership structure. Numerous assets of the concern are cross-owned. Such schemes are used to hide the ultimate beneficiaries of a business. Now there is no need for this.”
Stepan Samsonov
United Company "Russian Aluminum" (UC RUSAL, United Company RUSAL, UC Rusal) is a Russian aluminum company, the world's second largest producer of aluminum and alumina (based on 2009 results). The total capacity of all the company's aluminum smelting plants is 4.4 million tons, and for alumina production - 12.3. "Russian Aluminum" is among the top ten largest companies Russia in terms of revenue and is fourth in terms of this indicator private company(after three oil companies - LUKoil, TNK-BP and Surgutneftegaz). Company registered on the British island of Jersey. The company's headquarters is located in Moscow. The company's ordinary shares are traded on the Hong Kong Stock Exchange. RDRs for these shares have been traded on the MICEX and RTS since December 24, 2010. Shares and RDRs are convertible into each other.
Type - public company.
Listing on the stock exchange - HKSE - 0486.
Founded in 2007.
Key figures: Viktor Vekselberg (Chairman of the Board of Directors), Oleg Deripaska (General Director).
Industry - mining of aluminum ore, production of alumina, aluminum.
Turnover - $10.9 billion (2010, IFRS)
Net profit - $2.9 billion (2010, IFRS)
Number of employees - more than 75 thousand people
The company was founded in 2007 through the merger of aluminum and alumina assets of Russian companies " Russian aluminum", "" (SUAL) and the aluminum assets of the Swiss commodity trader Glencore. The merger of assets was completed on March 27, 2007. The new corporation retained the symbols of Russian Aluminum, the largest of the merged companies.
Russian aluminum
Russian Aluminum was formed in 2000 by merging the aluminum assets of the Siberian Aluminum and Sibneft companies. Included in its composition the most large enterprises aluminum industry of Russia and Ukraine: plants in Krasnoyarsk, Sayanogorsk and Nikolaev. Subsequently, the company began active expansion abroad. In 2006, it launched a new Khakass aluminum smelter in Sayanogorsk. By 2007, it controlled 80% of aluminum production capacity in Russia.
Siberian-Ural Aluminum Company
Siberian-Ural Aluminum Company was formed in 1997 by merging factories in and Kamensk-Uralsky, and later acquired a number of other (mostly small) enterprises in Russia and. By 2007, it controlled 20% of aluminum production capacity in Russia.
Crisis of 2008-2009
The company faced serious difficulties during the economic crisis of the late 2000s. The aluminum producer committed violations of covenants under a number of loan agreements (in particular, in October 2009, covenants were violated on a loan of $4.5 billion, which was taken out to purchase a 25% stake in Norilsk Nickel, and was overdue for servicing previously taken loans. Alfa- bank" even submitted to arbitration courts applications for declaring bankruptcy of Rusal's subsidiaries - the Siberian-Ural Aluminum Company and RusAl Krasnoyarsk Aluminum Plant (however, after the repayment of overdue loans, these applications were withdrawn.
In October-December 2009, UC Rusal signed a number of agreements with Russian and foreign banks on the restructuring of credit debt totaling $16.8 billion. Thus, debt to a number of foreign banks in the amount of $7.4 billion was restructured for a period of four years with the right to extend for another by three.
Initial public offering (2010)
At the end of January 2010, Russian Aluminum held an IPO on Hong Kong Stock Exchange, thus becoming a public company. During the placement of shares, the company sold 10.6% of shares, gaining $2.24 billion for them (accordingly, the entire company was valued at $21 billion). The largest investors in the IPO were Vnesheconombank and the Libyan state fund Libyan Investment Authority, which bought 3.15% and 1.43% of shares respectively. It is expected that UC Rusal will use the proceeds from the IPO to pay off debts.
As a result of the IPO, the shares of the previous main shareholders of the company changed - each of them allocated part of their stake for sale to investors in proportion to their share. The share of En+, controlled by Deripaska, decreased from 53.35% to 47.59%, the share of ONEXIM Group, owned by Mikhail Prokhorov, fell from 19.16% to 17.09%, the share of SUAL Partners of Viktor Vekselberg and partners - from 17 .78% to 15.86%, Glencore International - from 9.7% to 8.65%.
As of December 2008, 56.7% of the company's shares belonged to the energy holding En+, controlled by Oleg Deripaska, SUAL shareholders - 18.9%, Mikhail Prokhorov's ONEXIM Group - 14%, 10.3% - Glencore.
The Chairman of the Board of Directors of the company is Viktor Vekselberg. General manager- Oleg Deripaska (since January 2009). Among other senior managers of UC Rusal:
The parent company, as well as the main trader of Russian Aluminum, RTI Limited, is registered on the island of Jersey. According to the Vedomosti newspaper, RTI Limited is the owner of the raw materials, as well as the aluminum produced from them. In its activities, Russian Aluminum uses tolling scheme, in which raw materials are supplied from abroad to Russian aluminum smelters, processed there, and aluminum is again exported abroad.
Aluminum smelting:
Alumina production:
Bauxite mining:
Foil production:
Silicon production and powder metallurgy:
Raw Materials Division:
Engineering and Construction Division:
Energy Division:
Performance indicators
In 2008, the company produced 11.2 million tons of alumina (in 2007 - 11.3 million tons), 4.4 million tons of aluminum (in 2007 - 4.2 million tons.
The company's revenue in 2010 according to IFRS amounted to $10.9 billion (in 2009 - $8.2 billion), EBITDA - $2.6 billion ($596 million), net profit - $2.9 billion ($821 million).
The company's net debt in 2010 decreased from $13.63 billion to $11.47 billion.
According to the Vedomosti newspaper, registration of the parent company UC Rusal and the main trader of the group on the island of Jersey, as well as the use of a tolling scheme, allows minimizing tax payments: the company’s effective income tax rate is only about 2%.
The Bratsk and Krasnoyarsk aluminum smelters are the most efficient and are 100% loaded; the utilization of the rest of the company's enterprises is now at the level of 95-98%. Evgeny Nikitin said that at the division’s aluminum smelters there are opportunities to increase total production, but given the current price of metal and the situation on the market as a whole, it is not advisable.
In the middle of last year, metal production was suspended at a number of RUSAL plants located in the European part of the country until the price of aluminum increased and reached $2,400 per ton.
Buying up an entire industry with money of unknown origin, collecting billions of dollars in loans and, at the first danger, running for help from the state - this is the recipe for the success of Russian Aluminum and Rusal.
The simple name of the most famous asset can be written any way you like: “Rusal”, “RusAl”, “RUSAL”, RUSAL... In the company itself it is customary to use only capital letters and not put quotation marks, but this comes more from excessive conceit than from knowledge of the rules and customs of the Russian language.
We have before us the usual syllabic abbreviation for the combination “Russian aluminum”, which can be written without unnecessary pathos, so we’ll focus on the “Rusal” option.
Soviet period
This united company is a direct heir to the Soviet aluminum system, because almost all of its assets were pledged back in the USSR. The history of the world's largest aluminum producer and one of the largest alumina producers usually dates back to 2007, when the assets of Russian Aluminum, the Siberian-Ural Aluminum Company and the Swiss commodity trader Glencore merged. However, this story goes back much deeper - all the way back to 1932; It was then, during the implementation of the first five-year plan, that the first aluminum plant in the Union, Volkhovsky, was founded. The following year, a similar plant opened in Zaporozhye; in the late thirties, bauxite mining began in the northern Urals for the Ural Aluminum Smelter (launched in 1939). The triggering factor for the construction of aluminum plants in Novokuznetsk and Krasnoturinsk was the Great Patriotic War: the Zaporozhye plant was captured by the enemy, a similar threat loomed over Volkhov, and the aircraft industry needed a large amount of aluminum.
After the war, the arms race acted as a catalyst for the development of the aluminum industry; simultaneously with the start of construction of a number of huge hydroelectric power stations of the Angara-Yenisei cascade, the construction of aluminum production plants began in Krasnoyarsk and Bratsk - the two largest in the world; both were launched in the sixties. In 1985, the Sayanogorsk plant opened its doors in Khakassia. Thus, by the end of the eighties, the Union came out on top in the world in aluminum production. About 15% of Soviet aluminum was sent abroad.
Monopolization of the industry
Very soon after the collapse of the USSR, during the gop-privatization of the nineties, the British company TWG (Trans World Group) began to control a significant part of the aluminum industry in Russia: it financed the work of factories, the import and processing of raw materials - and as a result, the manufactured products became its property. It ended, however, that with the support of the state of Western raiders with domestic market displaced by our relatives; in 2000, after the merger of the country's main aluminum assets, the Russian Aluminum company was formed. It was she who controlled the largest aluminum enterprises in Russia and Ukraine, including the huge Bratsk and Krasnoyarsk plants, the Achinsk Alumina Refinery, as well as the Sayan Aluminum Plant, on the basis of which the Siberian Aluminum company was founded in 1997.
In the mid-2000s, about 70% (according to other estimates – 80%) of the country’s aluminum industry was concentrated within the framework of “Russian Aluminum”. The remaining 20–30% was produced under the control of SUAL - the Siberian-Ural Aluminum Company, which was created in 1996 by combining the share capitals of the Irkutsk and Ural plants.
Thus, by 2007, there were only two monopolists in the Russian aluminum market. And after 2007 - already.
Up to your ears in loans
The 2008 crisis became a difficult test for the newly-minted monster: Rusal was forced to violate the terms of several loan agreements and fell behind on payments on loans taken out earlier. Arbitration courts even received applications from Alfa Bank demanding that two banks be declared bankrupt. subsidiaries Rusala: Krasnoyarsk Aluminum Smelter and Siberian-Ural Aluminum Company. However, after the overdue loans were repaid, Alfa Bank withdrew its demands.
At the end of 2009, Rusal managed to achieve a debt restructuring to domestic and foreign banks totaling $16.8 billion. In total, about 50 loan agreements were revised.
In this difficult situation, Rusal's managers were not afraid to hold an IPO on the Hong Kong Stock Exchange at the beginning of 2010: 10.6% of the company's shares went for $2.24 billion. The situation was, to put it mildly, not the best, but Deripaska was in dire need of money, and the state offered support through VEB. The bank received 3.15% of the shares; another 1.43% was received by the Libyan state fund Libyan Investment Authority (the last breath of Mr. Gaddafi). The proceeds from the sale of shares were used to pay off part of the company's debts.
In October 2011, when the growth Russian markets began to seem stable, Rusal refinanced its loan portfolio by $11.4 billion. Among other things, the debt to a consortium of international creditors was repaid - mainly, again, through loans received from Russian and international banks.
By the end of 2013, the company's debts amounted to about $10.1 billion. For the world leader in the production of highly sought-after aluminum, this is still a lot - about half of the then market value. The fact is that asset management has always been carried out here very inefficiently, and management preferred the usual scheme of Russian bag-sellers “borrow - buy - resell - repay debt” to all other ways to increase profitability. And when it was not possible to “resell”, problems arose. Not all of Rusal's assets bring it profit.
Money offshore
And there are a lot of these assets. RUSAL includes 11 alumina plants and 15 aluminum plants, three plants for the production of powder products, two enterprises for the production of silicon, two plants for the production of secondary aluminum, four foil rolling plants, one cathode plant and two cryolite plants. Rusal's factories and representative offices are scattered across 13 countries - from Sweden to Guinea, from Jamaica to Italy. However, the main capacities, of course, are still concentrated in Siberia.
48.13% of Rusal shares belong to the energy holding En+ Group, which is controlled by the same Oleg Deripaska and his relatives (76.6%) and the unchanged VTB (3.8% plus 6.5% pledged to him). The parent company of Russian Aluminum, which is also its main trader, is RTI Limited; it is registered on the island of Jersey. The entire asset ownership system is built on offshore companies.
Modern Rusal is Russia in miniature. The company is frankly ineffective and opaque, but the collapse of even such a Rusal is unacceptable - because there are the fates of thousands of employees. In difficult conditions, for ridiculous salaries, they work at enterprises in a monopolized industry, where a specialist simply has nowhere to go - Deripaska’s people will meet you everywhere. The potential bankruptcy of Rusal would lead to the collapse of this empire, the destruction of horizontal connections between its parts and, as a consequence, to the shutdown of many productions. So shock therapy is unacceptable here.
This means that the good VTB Bank will again come to the rescue of Mr. Deripaska’s offshore companies.
