Russian companies under sanctions ask Kremlin for $1.6 billion in aid
The Russian companies suffering from the most recent round of US sanctions have asked the government for roughly 100 billion rubles ($1.6 billion) in assistance, reported Russian Finance Minister Anton Siluanov.
According to him, in one of the ministries a structure will be created that will communicate directly with the enterprises under sanctions, including Rusal and the power stations that service it, and draft proposals for the government on the basis of the received information.
The companies under sanctions need working capital, and the government intends to provide them with the necessary liquidity, Siluanov said.
In addition, the Russian government is considering the possibility of nationalizing them “for a symbolic sum, in order to maintain the production and workforce,” the minister noted, but clarified that nationalization was not on the agenda for Rusal.
There will be no state purchases of aluminum from billionaire Oleg Deripaska’s companies that were recently delisted from world markets after being blacklisted by the US Treasury Department, Siluanov announced. There is no possibility of an injection of state capital for these companies either.
Rusal – the largest producer of aluminum outside of China – may receive capital from Promsvyazbank (PSB), which was nationalized in December and is currently undergoing the procedure of becoming a bank to service the state defense order, Siluanov explained.
The PSB, where the government hopes to collect all the loans issued to defense enterprises, is also likely to come under sanctions, which will make it unable to carry out operations in dollars outside of Russia.
Rusal, which is already cut off from operations in dollars, has urgent need of working capital. The London Metal Exchange, the New York Commodity Exchange (COMEX), and the overwhelming majority of international trading companies have refused to work with Rusal.
If Oleg Deripaska is unable to reach an agreement to sell aluminum to China soon, Rusal’s key plants in Bratsk and Irkutsk will have to lay off staff, three Rusal staff members told Interfax.
According to them, the company has reserves for one and a half months – enough to pay the next round of salaries. But after this, at the start of June, it may be necessary to lay off roughly 10-15% of the staff.
The possibility of upcoming dismissals was voiced by Deripaska himself, who visited the Irkutsk province last week and met with company staff, one source reported.
Minister of Trade and Industry Denis Manturov said earlier that the ministry does not detect social tension at the Rusal companies. “We do not perceive any, but that’s the main thing, of course, we need to offer support for. We must support the personnel of these companies,” he said.