Will Rusal default on some liabilities due to new sanctions?

Rusal shares plunge sharply on U.S. sanctions

Glencore has previously signed a non-binding term sheet with EN+ regarding swapping its shares in Rusal for Global Depositary Receipts in EN+.

Rusal said on Wednesday that two of its non-executive directors resigned after the company's inclusion on a new list of USA sanctions targeting Russian companies and their owners.

Although the supply pipeline of the metal, more than two-fifths of which is sourced in Russian Federation, has not been directly hit by the sanctions, the market has been rattled by the inclusion of Deripaska on the blacklist.

While Russian markets, including the rouble, fell across the board on Monday, Rusal assets were hardest hit, with its Hong Kong-listed shares halving and the company warning it risked tipping into technical default.

Russia's broader market also sank, with the main blue-chip index trading 9.6 per cent lower, as major companies such as Sberbank and Norilsk Nickel fell sharply despite not being affected by the sanctions, which also hit six other oligarchs and 17 government officials.

Rusal's aluminum brands are being excluded from the LME, the world's biggest market for industrial metals, and the U.S. Comex exchange owned by the CME. The block on Russian supplies adds to earlier import tariffs imposed by the U.S. to benefit American producers most.

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Glencore PLC said Chief Executive Ivan Glasenberg had resigned as a director of United Co.

Rusal's dollar bonds slumped to record lows, two major customers said they were reviewing their contracts, and the LME distanced itself from the aluminium giant, in the latest aftershocks from United States sanctions. The company floated its shares in London in November, raising $1bn (£710m), despite concerns that it could face sanctions related to Deripaska's ties to Putin.

A Government spokeswoman was last night unable to say what the sanctions mean for Rusal and its employees here.

Shares in the firm were down another 3.81 per cent today after tumbling almost 60 per cent over the previous two days.

The US Treasury said the sanctions were linked to Russia's actions in Crimea, Syria and Ukraine and its interference in western democracies.

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