August 17, 2018 / 6:36 AM / 3 months ago

Rusal says board backs change of domicile to Russia

The logo of Russian aluminium producer Rusal is seen on a board at the St. Petersburg International Economic Forum 2017 (SPIEF 2017) in St. Petersburg, Russia, June 1, 2017. REUTERS/Sergei Karpukhin

MOSCOW (Reuters) - Russia’s sanctions-hit aluminum giant Rusal (0486.HK) said on Friday its board had discussed and approved a change of domicile from Britain’s Jersey to Russia in order to take advantage of new special tax regulations.

Rusal, which was hit with U.S. sanctions in April that seriously disrupted aluminum supplies, said the relocation was still subject to shareholder approval.

The announcement comes a day after En+ Group (ENPLq.L), which is also subject to U.S. sanctions on the two companies’ tycoon co-owner Oleg Deripaska, said it was considering re-domiciling to one of Russia’s new offshore zones.

Russia has created two special administrative regions where companies enjoy benefits such as a zero tax on profits received by way of dividends - an arrangement similar to foreign offshore tax havens.

Rusal said its board had decided that a change of domicile might be “in the best interests of the company and its shareholders as a whole” and entrusted the management with developing a detailed action plan.

Shares in Hong Kong-listed Rusal, the world’s largest aluminum producer outside China, are down 54 percent since the sanctions were imposed on April 6.

Reporting by Maria Kiselyova; Editing by Tom Balmforth; editing by David Evans

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