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. Last Updated: 07/27/2016

Chernoi to Quit Aluminum Business

Russian businessman Mikhail Chernoi, currently under arrest in Israel, said in a telephone interview that he has chosen to pull out of the Russian aluminum business and that his shares in the industry would be sold, most likely to Siberian Aluminum head Oleg Deripaska.

"Deripaska has the option of buying my shares in aluminum factories," Chernoi said Tuesday by telephone. "The agreement is in effect until 2003, and Deripaska can buy back the shares at any stage. Now we have signed the preliminary contract whereby I give him everything. All that remains is for him to pay for this transaction. If the deal is not satisfied under the conditions stipulated then the shares are to be returned to me," he said.

Deripaska did not say Tuesday whether he had bought the shares himself or jointly with someone else. "The negotiation process is underway," he said.

Chernoi said that so far only his aluminum assets were the subject of negotiations. For the time being he plans to hold onto his stakes in ferrous metallurgy, copper and coal companies. "If there is an interesting proposal then we will sell them as well and focus on Israel," said Chernoi.

The Associated Press reported Tuesday that Israeli police had arrested Chernoi on suspicion of illegally purchasing shares in Israeli's strategic Bezeq telephone company for $630 million. The shares were bought 18 months ago by local businessman Gad Zeevi. Law-enforcement bodies in Israel say that the true buyer was none other than Chernoi, who they say is linked to the Russian mafia.

The Aluminum assets of Siberian Aluminum are concentrated in United Company Siberian Aluminum. According to UCSA data, the company does not belong to the industrial investment group Siberian Aluminum, but rather is managed by it.

Last year, the Siberian Aluminum industrial investment group and the shareholders of Sibneft founded the company Russian Aluminum on an equal basis. Russian Aluminum is the second-largest aluminum company in the world. If the Anti-Monopoly Ministry approves the creation of Russian Aluminum, the aluminum assets of UCSA belonging to Sibneft and Siberian Aluminum shareholders will become the property of Russian Aluminum.

Until recently, UCSA belonged to Oleg Deripaska, certain managers from his team and to Mikhail Chernoi.

According to Deripaska, Chernoi's share in UCSA is 17 percent.