Rusal rejig is rehabilitation long shot

En+ MKPAO

07/03/2022 16:28

(The author is a Reuters Breakingviews columnist. The opinions
expressed are their own.)
    LONDON, March 7 (Reuters Breakingviews) - As its name
implies, Rusal  RUAL.MM  is heavily Russian and heavily into
aluminium. Trying to keep in with Western investors by carving
out its non-Russian bits, as parent company En+  ENPLq.L 
is contemplating  urn:newsml:reuters.com:*:nL3N2VA1Y8, looks like a challenge. Its
chairman, former British cabinet minister Greg Barker, quit on
Monday, perhaps with a view to lead the new offshoot. 
    The spinoff plan, according to the Times, appears to be to
create a clean break with En+’s 44% owner Oleg Deripaska and any
Russian assets. Rusal’s non-Russian bauxite mines contain an
impressive 1.3 billion tonnes of reserves and boast
ore-processing plants in countries including Ukraine, Jamaica
and Ireland. The problem is that most of its profit comes from
smelting aluminium, and most of that is done on Russian soil.
Assuming non-Russian assets account for nearly 10% of EBITDA, in
line with the 2020 results, and the international offshoot might
generate $320 million of EBITDA this year. On a 4 times
multiple, akin to big miners, the enterprise would be worth just
$1.3 billion. Even then, investors may still be wary of any
business that was once so closely linked to Russia. (By Ed
Cropley)

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 (Editing by Neil Unmack and Oliver Taslic)
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