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Shares in Oleg Deripaska’s Rusal and En+ plunge on US sanctions

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Shares in Oleg Deripaska's Rusal and En+ have tumbled today after the Russian oligarch and his businesses were targeted by US sanctions.

Aluminium giant Rusal's share price dropped more than 50 per cent to HK$2.30 on Hong Kong's Hang Seng index after its Moscow-listed shares fell 16 per cent on Friday.

Meanwhile, shares in En+, which listed on the London Stock Exchange in November, tanked, falling more than 38 per cent to 5.95p after dropping around 20 per cent on Friday.

Shares in Russia's London-listed steelmaker Evraz and miner Polymetal were also down 15 and 11 per cent respectively.

Read more: Russian oligarch Oleg Deripaska has officially stepped down from En+

Rusal, En+ and six other firms linked to Derpaska were included in fresh sanctions announced by the US on Friday. In total, 12 companies had sanctions imposed for profiting from a Russian state engaged in "malign activities".

According to Bloomberg's Billionaires Index, Deripaska's net worth has dropped by $1.1bn on the back of the sanctions, with his total fortune falling by $2bn so far this year.

In a filing to the Hong Kong stock exchange today, Rusal said it is "highly likely" the sanctions will have a material adverse impact to the company and its prospects, and that this "may result in technical defaults in relation to certain credit obligations of the group".

Rusal said it is evaluating the possible impact to its financial position, and that the publishing of its annual report for the year to December may be delayed.

"Shareholders and potential investors are advised to exercise extreme caution when dealing in the securities of the company."

The price of aluminium rose as much as 3.3 per cent this morning on supply disruption concerns in regards to Rusal, which produced 3.7m tonnes of primary metal last year, accounting for around six per cent of global output, according to analysts at SP Angel.

En+ echoed Rusal's comments in a statement today, adding that it was informed Citi had closed the books of its global depositary receipts programmes on Friday. En+ said it is "analysing the situation" with its legal advisers.

The US Treasury has said investors have until 7 May to divest or transfer debt, equity or other holdings in Rusal, En+ and Russian carmaker Gaz.

Read more: Friends disunited: US imposes sanctions on Russian oligarchs including Oleg Deripaska

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