Rusal: will spin off its high-carbon assets but does not consider any privatization action

Rusal (00486) issued a clarification announcement late on Wednesday that the company was continuing to develop plans to spin off its high-carbon assets, including contacts with the Hong Kong Stock Exchange, the Moscow Stock Exchange and related shareholders, but did not consider any action to privatize the company.

Rusal fell 1.06% to HK $7.48 in morning trading on Thursday.

On Monday, it was reported that the Hong Kong Stock Exchange (00388) was investigating a complaint initiated by the fund Odey Asset Management alleging that Rusal would be privatised after the spin-off, as a result of an agreement reached between Rusal's two major shareholders on the group's proposed spin-off of high-carbon assets.

The report quoted a letter sent by Odey Asset to the Hong Kong Stock Exchange, saying that En+ Group, Rusal's largest shareholder, had earlier reached a consensus with Siberia Ural Aluminium and described the relationship as an alliance. The alliance alerts Odey Asset that once the split is completed, Rusal's major shareholders may propose to privatize and acquire minority shareholders, thereby infringing on the rights and interests of minority shareholders.

Rusal issued a clarification announcement on the above media reports, saying that although the company continues to evaluate to maximize shareholder value, it does not include the proposed purchase of minority shareholders in the company to achieve privatization plans, and the board of directors is not considering any privatization.

Rusal issued an announcement in May 2021 indicating that it was setting up two companies with different strategies to spin off its high-carbon assets, the announcement explained. The board approved the proposed plan to spin off high-carbon assets to achieve carbon neutrality by 2050.

Rusal stressed that some aspects of the split plan may require approval from regulators, the Hong Kong Stock Exchange, the Moscow Stock Exchange, lenders, shareholders and other third parties, including the Hong Kong Stock Exchange, the Moscow Stock Exchange and related shareholders.

Analysts had previously pointed out that Rusal's current public shareholding is only about 10%, and if the company proposes a spin-off, it can be approved as long as it has the support of 75% of the shareholders present at the shareholders' meeting.

Rusal is currently listed on both the Hong Kong Stock Exchange and the Moscow Stock Exchange. Its major shareholder is Russian tycoon Oleg Deripaska, who owns about 57 per cent of Rusal through his En+ group, followed by Siberian Ural Aluminium. According to the 2020 annual report, Siberia Ural Aluminum Company actually holds more than 30% of the shares.

In early November, it was reported that the En+ Group expects Rusal to complete the listing of high-carbon assets in Russia in the second half of 2022. However, Oleg Deripaska has been at odds with Siberian Ural Aluminium, which has called on the new board to resume dividend payouts and opposed the spin-off.