Russian tycoon Oleg Deripaska's aluminum empire took up a U.S. offer for relief from sanctions and announced his resignation from the board and a reduction of his stock holdings to less than 50 percent.
The changes were announced on April 27 by Deripaska's En+ holding company, which owns 48 percent of Rusal, the largest aluminium producer in Russia and the second-largest worldwide.
The U.S. government imposed sanctions on Deripaska, En+, and Rusal along with dozens of other Russian business and political elites earlier this month, prompting a collapse in Russia's stock market and plunge in the ruble.
Rusal's stock fell by half after the sanctions were imposed, with investors fearing the company would be unable to stay in business. The sanctions bar Rusal from doing business in the United States or with U.S. nationals starting on October 23.
But the company's stock soared this week after the U.S. Treasury announced on April 23 that it would consider lifting the sanctions against Rusal if Deripaska gives up control of the company.
The Treasury said the sanctions were aimed at Deripaska and other people who have benefited from their close ties to the Kremlin and were not intended to hurt "the hardworking people who depend on Rusal."
"The path for the United States to provide sanctions relief is through divestment and relinquishment of control of RUSAL by Oleg Deripaska," the Treasury said.
It was not immediately clear whether Deripaska's agreement to step down from En+'sboard of directors and reduce his stock holdings to below 50 percent would satisfy the Treasury's demands for removing Rusal from the sanctions list.
A U.S. Treasury spokesperson said after the announcement that "a reduction in the percentage of ownership by a sanctioned individual is not necessarily in and of itself a basis for de-listing."
Treasury "conducts a thorough review of the facts and circumstances of each removal request in every individual case," the spokesperson said.
Reuters, citing sources "familiar with the matter," reported that Rusal is planning to go beyond the measures announced on April 27 and will soon appoint a fully independent board and new management team in hopes that the United States will remove it from the sanctions list.
"Rusal is in touch with U.S. authorities and hopes the measures will be enough for them to be removed from the sanctions list," one source told Reuters.
En+ also said that it had asked the United States to extend a May 7 deadline it has given banks to divest or transfer debt, equity, or other holdings in the company.
Without the extension, En+'s ability to maintain its listing on the London Stock Exchange will be affected, it said.
By adding Deripaska's businesses to its Specially Designated Nationals blacklist – the first time Washington had done so with a publicly listed Russian firm - the United States effectively choked off their access to the international financial system.
Rusal, the largest part of Deripaska's empire and the world's biggest aluminium producer outside China, has seen customers stop buying its aluminium and while the company's creditors have scrambled to offload its extensive debts.
Reuters reported that if Rusal does not succeed in its bid for sanctions relief, the company will be forced to sell all of its aluminum in Russia's domestic market, including selling up to 2 million tons to a state stockpile for building Russian weapons and military hardware.
Currently, Europe is Rusal's largest market, with 42 percent of the company's products sold there in 2017.
Reuters said Rusal has already stopped shipping aluminum outside of Russia and is awaiting word from the Treasury's Office of Foreign Assets Control before it will resume exports.
"Rusal is now in a very close dialogue with OFAC. It is very important for the company to comply with all their instructions to get out of the sanctions," an unidentified source told Reuters.