Rusal Shares Collapse After US Sanctions

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2018-04-09 HKT 21:41

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  • The price of billionaire Oleg Deripaska's company has plunged. File photo: Shutterstock

    The price of billionaire Oleg Deripaska's company has plunged. File photo: Shutterstock

Shares in Russian aluminium giant Rusal collapsed on Monday after Washington targeted it with sanctions, putting the metals major at risk of defaulting on part of its debt.

On the Hong Kong stock market, one of the exchanges where Rusal's shares are listed, it closed 50 percent down at HK$2.34.

The fall wiped more than 3.5 billion euros off the market capitalisation of the company which is headed by billionaire Oleg Deripaska and accounts for some seven percent of the world's aluminium production.

In Moscow, the other exchange where its shares trade, they were down 23 percent in mid-session business.

The meltdown came after US President Donald Trump on Friday announced sanctions against Russian oligarchs close to President Vladimir Putin following the diplomatic crisis sparked by the poisoning of former spy Sergei Skripal.

Washington has accused Deripaska of operating for the Russian government. Other magnates hit by sanctions include the director of state-owned energy giant Gazprom, Alexei Miller.

The Kremlin on Monday slammed the latest round of sanctions.

"This is an outrageous business from the point of view of illegality, from the point of view of flouting all the norms, and of course careful analysis is needed here," Putin's spokesman Dmitry Peskov told journalists.

Prime Minister Dmitry Medvedev said Moscow was looking at how to support the companies and sectors that have been hit.

In a statement, Rusal said the sanctions "may result in technical defaults in relation to certain credit obligations of the group".

The latest wave of sanctions also saw Russian stock market indices plummet around 10 percent.

Russia's currency also took a hit, with the dollar and euro rising to 59.81 and 73.42 against the rouble respectively. (AFP)