MOSCOW, May 18, 2011 (Dow Jones Commodities News Select via Comtex) -- Aluminum giant United Co. Rusal (0486.HK), controlled by Russian billionaire Oleg Deripaska, said Wednesday it will appeal the decision of a Ukrainian court to nationalize its local smelter.
"The smelter is controlled as before by Rusal and there are no talks about nationalization," Rusal said in an emailed statement. "The company will exercise its right to challenge the ruling in Ukraine's Supreme Commercial Court."
Rusal representatives weren't immediately available for further comment.
A Kiev appeal court Tuesday cancelled the decision of a lower local court, giving the green light to the termination of the agreement on the state's sale of 68.01% of Zaporozhye Aluminum Smelter to AvtoVAZ-Invest, which owned the smelter before Rusal took the control of the enterprise in 2007, Interfax reported earlier Wednesday.
Ukraine, which had previously privatized the smelter in 2001, claims the sale has to be reversed as the private owners failed to repay a $75.5 million loan taken out by the Zaporozhye smelter from a Ukrainian state-run bank for the purchase of production equipment, Ria Novosti said.
A Ukrainian court agreed to terminate the loan agreement in 2006 as the equipment purchased for the money had been taken over by a state-run foil-producing plant, Ria Novosti said.
However, Ukraine's General Prosecutor's office has claimed the termination of the agreement "infringed the property interests of Ukraine," Ria Novosti reported.