Deripaska fails to pay to Cherney

Published February 20th, 2005 - 01:22 GMT

Majority shareholders of Russian Aluminum (RusAl), one of the world’s top three aluminum producers, claim a debt estimated to be over $1 billion from the company’s current owner Oleg Deripaska, and believe he has failed to abide by signed obligations.


According to the respected Russian business newspaper Vedomosti, Deripaska was brought into RusAl in 2001 by veteran international metals industrialist Michael Cherney, who has lived in Israel since 1994. In an article published in, he reportedly acquired Cherney’s 40% share of the company through a $250 million initial payment.


Deripaska committed to pay Cherney five years later the then current value of 20% of RusAl stock, minus the $250 million already paid, according to the journal. “We still have a year to go,” Cherney was quoted as saying, “I am counting on Oleg Deripaska to pay me and other partners what was agreed on.” Sources close to Cherney suggest the tycoon was motivated to call attention to the debt in light of analysts’ reports that the Russian Renova company recently offered to buy Deripaska’s RusAl holdings for between $2.5-3 billion.


According to Vedomosti, current RusAl values would put the Deripaska obligation to Cherney in the range of $900 million to $1.75 billions. Brunswick UBS estimates the entire company to be worth $5.5-10 billion, with the 20% package thus estimated at up to $2 billion. Aton evaluates RusAl more modestly, between $7-8 billion.


RusAl insists that its stockholders owe nothing to the ex-partner. Russian and Israeli attorneys familiar with the agreement reportedly feel Cherney’s case is a convincing one, should it reach litigation.


Boris Berezovsky, another Russian tycoon residing in Britain, who owns a 15% share in RusAl, has also reportedly expressed skepticism over Deripaska’s failure to abide by certain business agreements.

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