A rush to cut Russia ties
Investors in London-listed Russian stocks such as metals giant EN+ face an uncertain future, with most firms suspended. Matthew Partridge reports
After “intense public pressure”, former energy minister and Tory peer Greg Barker has quit the board of Russian metals giant EN+, says Oscar Williams-Grut in the Evening Standard. EN+ – which was founded by sanctioned oligarch Oleg Deripaska and owns a controlling stake in Rusal, Russia’s biggest aluminium company – is one of 36 Russia-linked firms suspended by the London Stock Exchange last week. Barker had been “buffeted” by public calls for his departure, including from defence secretary Ben Wallace, while Iain Duncan Smith, the former Tory leader, “suggested that Barker’s position in the House of Lords should be reviewed”.
Prior to cutting ties fully with EN+, Barker – who had already resigned as executive chairman – had hoped to “take over large parts of the business in a restructuring aimed at distancing the company from Russia”, says Jamie Nimmo in The Sunday Times. Under the plan, EN+ would “carve out Rusal’s other operations, in Europe, Australia and Africa, into a separate company, which would have no Russian owners, control or management”. Barker “wants to take as many of the international businesses with him as he can, saving hundreds of jobs”, an anonymous source tells Nimmo. Critics have dismissed the idea as a “desperate attempt to shield assets for the inevitable coming sanctions”.
A headache for Glencore
EN+’s woes are a problem for the commodity miner and trader Glencore, which is its secondlargest shareholder and is now reviewing its position, says Alistair MacDonald in The Wall Street Journal. Any move to sell “would mark Glencore’s exit from a market which it was once heavily involved in”. The firm “has no operational footprint in Russia”, but is “a big trader of Rusal’s metal and trades other Russian commodities, including its oil”.Glencore also has a 0.5% stake in oil firm Rosneft and worked with Qatar’s sovereign wealth fund in 2016 to structure a complex debt-funded deal for a consortium to take a 19.5% stake in Rosneft for $11.5bn.
Investors in EN+ aren’t the only ones to face an uncertain future, says Philip Stafford in the Financial Times. The long list of Russian firms suspended by the London Stock Exchange last week include Sberbank, Gazprom, Lukoil and Polyus. Originally, the London Stock Exchanged had argued that allowing trading in these shares was necessary in order to give Western shareholders time to dispose of their shareholdings. However, with brokers “not wanting to trade Russian names”, the exchange decided that there was no point in waiting.
Still, this “did not mean the end of all Russianlinked stocks on the market”, says Jill Treanor in The Times. Trading continues in “stocks with Russian influence but incorporated in the UK”, such as Evraz, Polymetal and Petropavlovsk. All three miners also remain in the FTSE index series: Evraz and Polymetal were relegated from the FTSE 100 last week.