* Rusal talking to OFAC, seeks sanctions guidance -sources
* Still not shipping aluminium to customers -source
* En+ says Deripaska agrees in principle to reduce stake inEn+ (Adds U.S. Treasury Department comment, paragraphs 7, 8)By Polina Devitt and Dmitry ZhdannikovMOSCOW/LONDON, April 27 (Reuters) - Russian metals giantRusal will overhaul its board and management in hopesof persuading the United States to lift sanctions but it may beforced to halt aluminium exports for good if the plan fails,sources close to the company said.Washington this month imposed sanctions on billionaire OlegDeripaska and several companies in which he is a largeshareholder, including Rusal, in response to what the UnitedStates called Russia's "malign activities."Two sources familiar with the matter told Reuters on Fridaythat Rusal would soon appoint a fully independent board that inturn would install a new management team in the hope that theUnited States would remove the firm from its sanctions list."Rusal is in touch with U.S. authorities and hopes themeasure will be enough for them to be removed from the sanctionslist," one of the sources said.Rusal declined to comment.In another response to the U.S. sanctions, Deripaska's En+Group , which manages his hydropower assets and holdshis 48 percent stake in Rusal, said late on Friday thatDeripaska had agreed in principle to reduce his stake in En+ toless than 50 percent from the current 65 percent. In Washington, a U.S. Treasury spokesperson said changes inownership at Rusal do not guarantee the end of sanctions."A reduction in the percentage of ownership by a sanctionedindividual is not necessarily in and of itself a basis forde-listing," the spokesperson added. Deripaska also agreed to resign from En+'s board, which willhave a majority of new independent directors.The United States said on Monday it would consider liftingsanctions on Rusal if Deripaska ceded control of the company.It was not immediately clear if the steps announced by En+on Friday and those the sources said were planned by Rusal wouldbe enough for the U.S. sanctions to be lifted.En+ also said that it had asked the United States to extend
the May 7 deadline it has given banks to divest or transferdebt, equity, or other holdings in the company.Without the extension, En+'s ability to maintain its listingon the London Stock Exchange will be affected, it said.By adding Deripaska's businesses to its Specially DesignatedNationals blacklist - the first time Washington had done so witha publicly listed Russian firm - the United States effectivelychoked off their access to the international financial system.Rusal, the largest part of Deripaska's empire and theworld's biggest aluminium producer outside China, has seencustomers stop buying its aluminium and creditors scramble tooffload debt.
Hong Kong-listed Rusal lost almost 60 percent of its sharevalue after the imposition of sanctions, while aluminium andalumina prices soared, hitting businesses around the world,including in the United States.Earlier this week, the United States moved to ease some ofthe measures against Rusal, saying it did not want to hit "thehardworking people who depend on Rusal". EXPORT THREATThe changes in the board of directors and management teamare being discussed with other shareholders, another sourcefamiliar with the situation said. Rusal's other shareholder,Viktor Vekselberg, was also put on the sanctions list.However, if this option does not work out, Rusal will beforced to focus exclusively on the domestic market and sell partof its production to a state stockpile, the source said."Up to 2 million tonnes will be processed internally andmeet the needs of the military-industrial complex," the sourcesaid."In this case, Rusal would leave the global market, and ofcourse no one wants this to happen," the source added. Rusal declined to comment.In a sign of escalating supply crisis, sources told Reutersmultiple shipments of alumina were being exported from China ina rare move prompted by sanctions on Rusal. China is the biggest global producer and consumer ofalumina, a compound extracted from bauxite ore that is smeltedinto aluminium metal.The sanctions against Rusal have up-ended the supply chainas companies cut contracts to use Rusal metal, leaving producersof cans or auto parts scrambling for supplies in a developmentthat will likely feed into higher costs for buyers of goodsranging from tractors to beer.According to the first source close to Rusal, the company isnot shipping aluminium to customers around the world who are nowawaiting guidance from U.S. authorities."Rusal needs clarity from OFAC before it can resume thoseshipments," the source said, referring to the Office of ForeignAssets Control of the U.S. Treasury, which enforces economic andtrade sanctions based on U.S. foreign policy and nationalsecurity goals.Aluminium prices in London fell on the news of thepotential board reshuffle but then recovered on fears exportscould remain disrupted. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^BREAKINGVIEWS-Deripaska's sanctions sale may have silver lining ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Polina Devitt and Dmitry Zhdannikov; Additionalreporting by Chris Sanders in Washington; Editing by DaleHudson, Jason Neely, Adrian Croft and David Gregorio)
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