HONG KONG (Reuters) - Shares of United Company RUSAL Plc (0486.HK), the world’s largest aluminum producer, fell as much as 5.7 percent on Wednesday after its billionaire chairman quit, saying the heavily indebted company was in crisis after a long battle with rival oligarch Oleg Deripaska.
The dispute reinforced investors’ belief that RUSAL is a company that does not place high importance on minority shareholders, said Robin Tsui, an analyst at BOC International.
“If the chairman resigned it means RUSAL is like a one-man show, even the chairman can’t really have a say in the company,” he said.
Viktor Vekselberg’s resignation widens a rift with controlling shareholder Deripaska, who had sought to build a Russian metals and mining business on a global scale by merging RUSAL with Norilsk Nickel (GMKN.MM), the world’s top nickel and palladium miner.
The company will hold a meeting to discuss the resignation of the chairman on Friday.
RUSAL's stock, which was suspended on Tuesday, hit a session low of HK$5.77 before rebounding slightly to HK$5.86, down 4.3 percent, lagging a 1 percent rise in the benchmark Hong Kong index .HSI.
RUSAL’s shares are now 46 percent below their initial public offer price of HK$10.80.
“The overhang is going to be in place until the whole issue is resolved,” Tsui said.
Investors knew about RUSAL’s high debt and high interest position and the main driver for the company was the price of aluminum going forward, analysts said.
The global aluminum industry is suffering a supply glut on the back of a deepening European debt crisis and global economic slowdown which hurt demand and prices for the lightweight metal, pushing many producers into the red and triggering a round of output cuts, including at top U.S. aluminum maker Alcoa AA.N.
Reporting By Alison Leung; Editing by Jacqueline Wong