May 23, 2018 / 9:10 AM / a year ago

Shares in Russia's GAZ up after U.S. extends sanctions deadline

MOSCOW (Reuters) - Shares in Russian car maker GAZ (GAZA.MM) rose in early trade on Wednesday after Washington gave U.S. customers more time to comply with sanctions against the Russian company.

The United States imposed sanctions on GAZ owner Oleg Deripaska and his companies in April, a move intended to punish Moscow for its alleged meddling in the 2016 U.S. election. In recent weeks, however, Washington has softened its stance.

On Tuesday it gave Americans until Oct. 23 instead of June 5 to comply with sanctions against GAZ, a deadline extension offered earlier to aluminum producer Rusal (0486.HK), Deripaska’s main asset.

GAZ shares were up 2.45 percent at 418 roubles at 0856 GMT after hitting a high 428 roubles to outpace the MOEX stock index .IMOEX, which was down 1.0 percent.

GAZ declined to comment.

The deadline extension could have implications for German carmakers Volkswagen (VOWG_p.DE) and Daimler (DAIGn.DE), as well as with U.S. firm Cummins Inc (CMI.N), which have contracts with GAZ.

Washington also said it would consider lifting sanctions on GAZ if Deripaska ceded control. The metals tycoon currently controls 63.8 percent of the car maker, largely through his investment vehicle Basic Element.

Basic Element declined to comment.

En+ Group (ENPLq.L), an umbrella company which manages Deripaska’s aluminum and hydropower businesses, said on April 27 that he had agreed in principle to reduce his stake to less than 50 percent from 65 percent.

A source close to the company told Reuters last week that En+ Group would likely ask the U.S. Treasury for more time to implement this change.

Reporting by Polina Ivanova and Gleb Stolyarov; editing by by Jason Neely

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