SibAl Looks to Change Its Image

Oleg Deripaska is planning a makeover for his Siberian Aluminum empire --which will likely be called Base Element -- as the holding sheds its connection to Mikhail Chernoi, the controversial metals magnate currently living in Israel.

The final decision regarding the new name will be taken soon, SibAl spokesman Alexei Drobashenko said. The new company will manage all of Deripaska's assets, he said.

Chernoi said earlier this week that he has severed ties with SibAl.

"At the end of last year, I gave all my partners the option of buying my shares in Russian companies. Today the conditions of the contract are being performed," he said.

He said he no longer jointly owns property with Deripaska, nor does he have any relations with Iskander Makhmudov, president of the Urals Mining Co. Chernoi sold his shares in copper factories connected with Urals Mining to Makhmudov's group along with his coal and ferrous-metals companies.

Chernoi and Makhmudov's share in the aluminum plants -- which were managed by SibAl before being transferred to Russian Aluminum -- were bought by Deripaska. Payment has yet to be made. Deripaska formed RusAl along with core Sibneft shareholders earlier this year.

Chernoi has lived outside Russia since 1994, but last year he said in an interview that 80 percent of his total assets are in Russia. He purchased them at the start of the 1990s together with his partners -- his brother Lev, Makhmudov and Deripaska.

The first time Chernoi parted with his aluminum shares was in 1997, when he was pushed to do so by his brother. The brothers had serious differences at that time, and Mikhail was forced to leave the business. He sold his shares in the biggest aluminum factories in the country -- the Bratsk and Krasnoyarsk aluminum smelters, as well as some shares in the Sayansk Aluminum Factory.

But Makhmudov and Deripaska stayed partners with Mikhail Chernoi. The exact structure of their empire is a secret. Chernoi and Deripaska owned their companies in the aluminum industry as equal partners.

Chernoi became superfluous in this system after Deripaska decided to combine SibAl's aluminum assets with those that Lev Chernoi and the London-based Trans World Group sold to tycoon Roman Abramovich.

It was with Abramovich that Deripaska bought shares in car factories, the NOSTA metals company, Avtobank, Ingosstrakh insurance firm and the Ust-Ilimsk forestry companies.

Meanwhile, a number of countries had closed their borders to Chernoi, claiming he had links to the mafia.

Representatives of RusAl, Sibal and Urals Mining unofficially have confirmed the deal has been completed, but did not give any details.

One source said the contracts between the parties oblige all participants to the transactions to refrain from detailed commentary.

Another source said: "There was a time when they did business together. Each had their own function. Now they have stopped being necessary to one another and they have gone their separate ways."