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. Last Updated: 07/27/2016

Aluminum Holding's Men to Run Smelters




Giant aluminum holding Russian Aluminum has strengthened its grip over the Bratsk and Krasnoyarsk aluminum smelters in southern Siberia by putting loyal managers on the boards of both companies.


Shareholders meetings held at the Krasnoyarsk smelter, or KrAZ, and Bratsk smelter, or BrAZ, last week went quietly after Russian Aluminum, which controls about 75 percent of the nation's aluminum output, settled disputes with minority shareholders.


The shareholders meeting held at Bratsk started June 3 when Russian Aluminum controlled a 66 percent stake in the company and ended Monday with shareholders of oil major Sibneft taking 99 percent of BrAZ's shares.


Sibneft shareholders snapped up a huge chunk of the nation's aluminum industry earlier this year, taking over a 66 percent stake in BrAZ, a 56 percent stake in KrAZ and controlling stakes in the Novokuznetsk smelter and the Achinsk aluminum plant.


They later convinced BrAZ board chairman Yury Shlyafstein and BrAZ general director Boris Gromov to sell their 33 percent stake in the firm.


Siberian Aluminum head Oleg Deripaska, who agreed to put his assets under the Russian Aluminum umbrella in a deal with Sibneft owner Roman Abramovich, told the daily Vedomosti in an interview in June that Shlyafstein and Gromov had been offered very favorable terms in return for their stakes.


Details of the deal were not available, with all parties involved citing confidentiality. The shareholder meetings were conducted under a cloud of secrecy.


"All I can say is that our company is no longer included on the register of shareholders," said Vasily Boiko, president of the investment firm Vash Finansovy Popechitel.


Earlier media reports put Vash Finansovy Popechitel's stake in BrAZ at 9 percent, but though it no longer formally holds aluminum shares in its portfolio, Boiko acted as a chairman at a shareholder meeting Saturday.


"It all went very smoothly without a hitch," he said.


Alexander Boiko, who was elected chairman of the BrAZ board, is not related to Vasily Boiko said Vash Finansovy Popechitel's Boiko.


At KrAZ, Russian Aluminum initially acquired a 56 percent stake in February and has been building up its portfolio, but there is no exact information on what percentage is in the hands of Sibneft shareholders.


While it was occupied in battles over KrAZ and BrAZ, Russian Aluminum did not attend the shareholder meeting at Irkutskenergo, where BrAZ formally owns 10.9 percent of shares.


Aluminum requires vast amounts of electricity and it is important that Russian Aluminum keeps an eye on tariffs at Irkutskenergo, a key electricity supplier to BrAZ. However, despite BrAZ's stake, no one representing the smelter was elected to the firm's board Friday.


BrAZ did not register to participate in Irkutskenergo's shareholder meeting, attended by only 55 percent of shareholders. But the Russian Aluminum's spokesman said steps will be taken to manage the stake.


Irkutskenergo managers took four of 11 seats in the board, federal authorities hold three seats, national power grid Unified Energy Systems will have two votes and minority shareholders received the remaining two positions.


Vash Finansovy Popechitel's Vasily Boiko took one of the two seats held by outside shareholders, gathering 6 percent of the votes.


The Irkutsk regional administration could not use its voting rights as a court had seized its 20 percent stake after the federal government used to legal action to recover its stake in Irkutskenergo.


Federal authorities filed a suit in February to acquire the 40 percent stake held by local officials, but legal action by the Irkutsk administration resulted in the Supreme Arbitration Court postponing its decision until Aug. 9.


However, at the last minute the court unfroze a 20 percent stake owned by the federal authorities, so the dispute now concerns the remaining 20 percent stake.