Oleg Deripaska is embroiled in the scandal over the bankruptcy of Bogoslovskiy Aluminium Plant (BAZ), which is a part of his RusAl Group. The plant is the only company of the city of Krasnoturynsk, Sverdlovsk Region. It employs about 3,500 people, almost all labour force of the city.
As of the first half of 2011, BAZ incurred losses of 180 million roubles ($2.9 million). BAZ officials allege that the losses were due to high prices of electricity.
Deripaska’s decision is to close down the unprofitable enterprise. In April 2011, for the same reason Deripaska shut down Zaporozhsky Aluminium Plant, offering workers to move to any of RusAl plants, say, in Siberia.
BAZ plans to stop producing alumina bricks and dismiss half of its employees. The situation, surrounding BAZ, resembles that of the city of Pikalevo, Leningrad Region, back in 2009, when prime minister Vladimir Putin intervened to prevent closure of a main plant in so called one-company city.
With aluminium prices going down, Deripaska loses millions of dollars every year. It was rumoured that RusAl had already approached its key creditors asking to restructure the company’s debt. The company asked for postponing the due dates for interests on loans until 2012. At first RusAl denied allegations. Later on in a statement the company said that “it began negotiations with Russian and foreign creditors on the issue of changing credit agreements in accordance with the current market situation”.
The company will cut expenses by redundancies and lowering administrative costs. The analysts say that the company may pay dividends this year, the first time since 2009. According to the shareholders’ agreement, the company has policy of paying dividend at a rate of no less than 50% of net profit after tax.