|
EBRD and IFC welcome commitment to high governance and business standards by RUSAL Chairman Oleg Deripaska
Banks confirm financial support for Komi Aluminium project after change in ownership
The European Bank for Reconstruction and Development and the International
Finance Corporation have confirmed that they plan to disburse loans totalling
$150 million for the Komi Aluminium project after determining that the recent
entry of Russian Aluminium (RUSAL) as an equal partner is acceptable.
The decision is an important step towards final agreement to disburse. It is
based on full disclosure of ownership by RUSAL’s and Basic Element’s owner
Oleg Deripaska, and additionally provides for detailed commitments to greater
transparency, good corporate governance and high business standards, covering
RUSAL and Basic Element. Compliance with these commitments is covenanted in
legal documentation with the EBRD and IFC.
In particular, the EBRD and IFC welcome the adoption by RUSAL of an action
plan over an 18-month timetable covering significant corporate ownership
disclosure, the publication of financial information and specific steps aimed
at improving corporate governance – notably the election of three independent
directors. These independent directors, to be appointed in agreement with the
EBRD and IFC, will chair and constitute the majority of the sub-committees
that will oversee audit and corporate governance as well as other corporate
matters.
For Basic Element, the agreement encompasses the disclosure of information on
the holding’s investments as well as the adoption of a code of ethics.
Eighteen months ago, the EBRD and IFC agreed to provide financing to SUAL,
Russia’s second-largest aluminium company, to expand the Middle-Timan mine in
the Komi Republic, 250 km south of the Arctic Circle. In mid-2005, SUAL formed
a 50-50 joint partnership for the Komi project with RUSAL, Russia’s largest
aluminium producer.
The IFC and EBRD then conducted an extensive review of RUSAL’s record and
ownership structure in order to determine if they could maintain their support
to the Komi project because the partnership’s new ownership constituted a
material change to the original loan agreement.
The EBRD and IFC, the private sector arm of the World Bank Group, had agreed
to initial 9-year loans of $75 million each, to be used to increase the
domestic production of bauxite, the raw material of the aluminium industry.
One of Russia’s strategic priorities is to develop its own bauxite deposits in
order to reduce its dependence on imports and make its domestic aluminium
industry more competitive.
A key part of both the EBRD’s and the IFC’s strategy is to help Russia use its
natural resources as a catalyst to diversify and develop the economy,
decreasing reliance oil and gas while setting high standards for Russian
corporates in terms of disclosure, transparency, governance and business
conduct, as well as environmental protection.
|
