BUSINESS

Deripaska Relinquishes Role as RusAl CEO

By Simon Ostrovsky

Staff Writer

MOSCOW - After orchestrating a hotly contentious and occasionally violent campaign to forge the aluminum industry's choicest assets into a single global giant, Oleg Deripaska is moving on.

Deripaska will step down as Russian Aluminum, or RusAl, CEO "within days" to concentrate on managing his rapidly growing pool of assets, including 75 percent of RusAl, the company said Wednesday.

RusAl's chief operating officer, Alexander Bulygin, will take over for Deripaska, who will likely become chairman of the board.

Deripaska's holding company, Base Element, or BasEl, last month paid an estimated $2 billion for half of fellow billionaire Roman Abramovich's 50 percent stake in RusAl.

The company was formed in 2000, when Deripaska agreed to merge his metal industry assets with those of Boris Berezovsky's Sibneft. Abramovich later took control of Sibneft and merged it with his other holdings into Millhouse Capital, which still controls 25 percent of RusAl.

"When you have full control of a company there aren't any problems getting information from management," BasEl spokeswoman Yeva Prokofyeva said, explaining Deripaska's decision to give up managerial control of the company.

Relations between Deripaska and Abramovich have been at times strained as the two titans competed for control of RusAl and other companies in the 1990s. Unlike Deripaska, however, Abramovich decided to liquidate his holdings in Russia to focus on London soccer club Chelsea, which he bought this summer. In the last several months, Abramovich has sold stakes in RusAl, flagship airline Aeroflot, oil major Sibneft and auto industry holding Ruspromavto. He still controls a 26 percent stake in newly merged YukosSibneft.

For Deripaska, relinquishing day-to-day control of his prized asset signifies a change in roles, from being an executive to being an investor, Prokofyeva said.

"He is chairman of the board of directors of Base Element and controls a lot of other assets," she said. "He can't be involved only in RusAl's businesses - chairman of the board is a more fitting position to oversee its operations."

BasEl owns stakes in about a dozen companies involved in everything from metals and automobiles to aviation and insurance, according to the company web site.

Industry analysts polled Wednesday agreed that Deripaska's decision to quit as CEO made sense, considering all the other businesses he is involved with.

They said, however, that it was hard to say what it will mean for RusAl itself, since the company, which is not public, is largely opaque. The company has said that it wants to go public, and wants to place 25 percent of its shares by 2007.

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