Rusal appoints state representative to board

A Russian state representative has been appointed to the board of Oleg Deripaska’s UC Rusal, increasing the government’s muscle over the indebted aluminium group after it granted it a $4.5bn bail-out loan last year. UC Rusal said on Friday it had appointed Anatoly Tikhonov, the first deputy head of VEB, the state-controlled bank that disbursed the bail-out loan, to the company’s board at the end of March. It said the move was one of the conditions for the $4.5bn government loan. The move comes as Mr Deripaska, once Russia’s richest man, is locked in talks to restructure $14bn in loans to foreign creditors and Russian state banks, of which $8bn falls due this year, including the $4.5bn loan to VEB, before a two month standstill agreement expires. The state-owned bank took 25 per cent stakes in key aluminium smelters belonging to Rusal as additional collateral for the loan. Igor Shuvalov, the influential first deputy prime minister, has said the government is yet to decide whether it will seize the collateral if Mr Deripaska fails to meet the payment, but indicated he personally was against extending the maturity of the loan beyond its October 31 due date. The government issued the $4.5bn bail-out loan to prevent UC Rusal’s 25 per cent stake in Norilsk Nickel, the world’s biggest nickel miner, from falling into the hands of foreign creditors after covenants were breached on the loan. VEB also took the 25 per cent Norilsk stake as collateral, moving a state representative, Alexander Voloshin, the former Kremlin chief of staff, to chair the board, as well as moving another VEB representative onto its board. .Copyright The Financial Times Limited 2009