Rusal Repays $85.9 Million to Alfa Bank to Save Units (Update1)

Sept. 25 (Bloomberg) -- United Co. Rusal, the world’s largest aluminum producer, repaid $85.9 million to Alfa Bank after the lender asked Russian courts to declare two of the metal company’s units bankrupt. “Alfa Bank now has no reason to continue its legal proceedings,” Rusal, run by Russian billionaire Oleg Deripaska, said in a statement posted on its Web site today. “Rusal has completely fulfilled its current obligations to this lender in accordance with the existing creditors’ agreements.” The bank, Russia’s largest private lender and majority- owned by billionaire Mikhail Fridman, said Sept. 24 it had asked the courts to declare Rusal units Krasnoyarsk smelter and OAO Sibirsko Uralskaya Aluminum Co. bankrupt because of unpaid debt. Alfa received the money late yesterday, a spokeswoman at the bank who declined to be identified in line with company policy said by phone today. Other businesses under Deripaska’s Basic Element holding company still owe Alfa Bank about $615 million including interest and fines, she said. Basic Element spokesman Sergei Babichenko said today by phone that companies it controls owed $500 million of principle debt to Alfa before the latest repayment. Rusal said it settled the Alfa debt after talks with its lenders. The company, which owes $7.4 billion to foreign creditors, said Sept. 18 it reached an agreement with them to extend a freeze on repayment until the end of October.