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. Last Updated: 07/27/2016

Alfa Bank Fires Volley In War With Deripaska

Billionaire Mikhail Fridman’s Alfa Bank on Thursday demanded the bankruptcy of two units belonging to United Company RusAl for lapsing on debt repayments in the latest twist in a feud with Oleg Deripaska.

Alfa Bank also traded conflicting statements with GAZ, the carmaker owned by Deripaska, over the sticking point in debt restructuring talks between the private bank and the auto producer.

Deripaska is in protracted talks with Russian and international lenders to restructure the debts faced by his various companies.

The resolution of his various disputes with Alfa could prove crucial in his attempts to keep his industrial empire intact.

Alfa Bank issued a statement saying it had asked courts to consider declaring bankrupt two units of RusAl — the Siberian-Urals Aluminum Company and the Krasnoyarsk Aluminum Plant — after they failed to repay debts totaling over $70 million.

RusAl responded by calling the action a “misguided attempt to destabilize the operations” of RusAl. “This bankruptcy attempt is destined to fail,” it said in a statement.

RusAl said last week that it expected to finalize long-running debt restructuring talks with lenders by the end of October.

It said Alfa Bank was the sole lender that had refused to join its debt standstill agreement, and called the bank’s position “unconstructive.”

Vladimir Tatarchuk, Alfa Bank’s deputy chief executive, said his bank was ready to adhere to restructuring terms agreed on by other creditors of GAZ but had failed to reach agreement on the debts of other units of Deripaska’s Basic Element group.

“Lengthy negotiations on the restructuring of debts owed by units of Basel Group to Alfa Bank have brought no results, regardless of the readiness of Alfa Bank to adhere to the restructuring of debts of GAZ,” Tatarchuk said in a statement.

He said Alfa Bank reserved the right to defend its position in court, adding that the bank was in talks with other Basel creditors on the possible acquisition of their debt demands against the group’s units.

GAZ, Deripaska’s car company, said late Wednesday that it was close to restructuring its 39 billion ruble ($1.3 billion) debt but for its failure to agree with Alfa, which it accused of demanding exceptional conditions.

GAZ said it had signed an agreement on debt restructuring with 21 Russian and foreign banks that would extend repayment by five years, including a two-year grace period on the main debt.

But Tatarchuk denied his bank was obstructing a deal, saying, “Alfa Bank is ready to adhere to the GAZ debt restructuring agreement.”

In June, Fridman filed a bankruptcy suit against a Deripaska’s building firm. Before that, Fridman was rebuked by President Dmitry Medvedev for harassing big companies over debts.

He and Deripaska issued a statement later saying they were not in conflict over debt.