Russia’s second largest oil producer Lukoil has put on ice its plans to list on the Hong Kong Stock Exchange. Lack of an accord between Russian and Hong Kong regulators means Lukoil has, for now, shelved its plans for a $1bn to $2bn secondary listing.
This is despite the company being keen to find Chinese partners for its big overseas operations as it gears up to ship more oil and products to the Asian giant.
Norilsk Nickel gained 1.4 per cent in Moscow on Tuesday on a settlement in the long-running management dispute between billionaire shareholders Vladimir Potanin and Oleg Deripaska.
Roman Abramovich’s arrival as a peacemaker might have merited a warmer welcome given the bile surrounding Norilsk. But it was a bad day for the Russian market – and, in any case, the deal’s details suggest that trust remains in very short supply. One clause envisages penalties of over $560m at current share prices. The hatchet is, at best, half-buried.
More bad news for Oleg Deripaska. As a huge lawsuit brought by a fellow Russian oligarch against him began in London, the billionaire chief executive of Rusal would have received word from Nigeria that his company’s investment there is in peril.
The supreme court in Abuja ruled on Friday that Rusal should be stripped of ownership of the former state-owned Aluminium Smelter Company of Nigeria (Alscon).
While emerging markets as a whole are suffering in the latest storm in the eurozone crisis, central and eastern Europe have been hit particularly hard.
On Monday, the $-denominated MSCI index of central and east European equities was down a full 4.6 per cent, more than double the 1.9 per cent decline in global EMs. Stocks, bonds and currencies were all sold off in the flight to safety.
What’s on the mind of billionaire Oleg Deripaska, the controlling shareholder in Rusal, the world’s biggest aluminium company? At a meeting with journalists on Friday, he talked about the outlook for the alumnium industry (cautious), the planned toughening of Russia’s enviromental rules (a game-changer), his dispute with business partner Viktor Vekselberg (almost no comment) and the long-running row at Norilsk Nickel (hostilities suspended).
But what excited Deripaska most were Russian lending rates. At 9 per cent a year and more, they are far too high, he says. And the answer is: a change in the “ridiculous” management team at the central bank.
The Russian aluminium producer’s net profit for 2011 fell by more than 90 per cent after a $1.4bn writedown on the value of its 30 per cent stake in Norilsk Nickel. Lex discuss the implications for the investors of the determined pursuit of Norilsk by Rusal’s controlling shareholder Oleg Deripaska.
Russian oligarchs make uneasy partners – both for each other and for other shareholders. The falling out at Rusal, the world’s largest aluminium group, isn’t the first such row, and it won’t be the last.
Viktor Vekselberg resigned as Rusal chairman late on Monday, declaring that the company was in “deep crisis” because of bad management and heavy debt. On Tuesday, Oleg Deripaska, Rusal’s dominant shareholder, hit back: the company announced that Vekselberg had “failed to perform his functions”, and not turned up to a live board meeting for a year.
UC Rusal’s controversial, but ultimately successful, Hong Kong listing was supposed to be the harbinger of an important new geoeconomic trend. If the heavily indebted aluminium group, controlled by oligarch Oleg Deripaska, could raise $2.2bn on the Chinese special administrative region’s stock exchange, surely other Russian resource companies would follow its lead.