Deripaska Says Cherney Claim ‘Resembles a Blackmail’ (Update1)

Nov. 17 (Bloomberg) -- United Co. Rusal’s billionaire owner Oleg Deripaska, who is seeking to lure investors for an initial public offering in Hong Kong, dismissed a claim for a stake in the aluminum producer by a former business associate. The claim by Michael Cherney is “nonsense” and “resembles a blackmail,” Deripaska said in an interview in Singapore. Rusal, the world’s largest producer of the metal, is preparing to sell a 10 percent stake and list its shares in Paris. The Moscow-based company needs to raise cash to help repay more than $14 billion of debt, which Rusal is trying to restructure with more than 70 lenders. Cherney says he’s owed at least $3 billion after Deripaska reneged on an agreement to exchange part of Siberian Aluminium for a future interest in what later became Rusal. Deripaska, owner of 57 percent of Rusal, can be sued by Cherney in the U.K., a London court ruled in July. In the mid-1990s, several groups vied for control of Russia’s aluminum industry, and unsolved murders accompanied the struggle, spawning the label “aluminum wars.” Deripaska, 41, previously worked with commodity trader Trans-World Group, which was owned by investors including Russian-born Cherney, and was managing an aluminum smelter in Siberia at the age of 26. Deripaska pooled the factories he controlled with assets controlled by fellow metals investors Roman Abramovich to create Russian Aluminium in 2000. Russian Aluminium became part of Rusal following a three-way merger in 2006 with domestic rival Sual Group and the alumina assets of Swiss commodities trader Glencore International AG. Russian Workers Deripaska is worth $3.5 billion, according to Forbes magazine. His Basic Element investment company controls companies that employ 1 million people in Russia. “A lot of people are jealous but I don’t care, I am not working for money,” Deripaska said in the Nov. 15 interview. “I have my interests and I try to realize what I can do, and for now I am focused on Rusal because it is very important for Russia.” Deripaska also said restructuring of Rusal’s debt is “almost” complete. Deripaska was in Singapore accompanying Russian President Dmitry Medvedev, who was attending the Asia- Pacific Economic Cooperation forum. “No one would be convinced by Mr. Deripaska’s continued attempt to avoid dealing with the substance of a valid claim by resorting to generalized and false smears against Mr. Cherney,” a spokesman for Cherney in Jerusalem, who declined to be named, said in an e-mailed statement.