September 17, 2018 / 8:59 AM / a month ago

Rusal shares rise as U.S. gives it some room for new contracts

MOSCOW (Reuters) - Shares in Russian aluminum giant Rusal (0486.HK), which has been hit by U.S. sanctions, rose on Monday after Washington said it would allow the company’s customers prior to the imposition of sanctions to sign new contracts.

FILE PHOTO: Aluminium ingots made at the Rusal Krasnoyarsk aluminium smelter taken May 25, 2018. REUTERS/Ilya Naymushin/File Photo

Rusal shares were up 3 percent in Hong Kong, outperforming a 1.3 percent decline in the benchmark index .HSI. Its Moscow shares (RUAL.MM) climbed 11 percent, the best performers on the MOEX index .IMOEX, which was down 0.2 percent.

On Friday evening, the U.S. Office of Foreign Assets Control (OFAC) said Rusal’s customers before the imposition of sanctions on April 6 could sign new contracts with the company without the risk of being hit with “secondary sanctions” themselves.

The guidance did not, however, address whether OFAC would extend a deadline of Oct. 23 for U.S. customers to wind down business with Rusal.

In September, sources familiar with the discussions told Reuters that European customers would avoid 2019 supply agreements with Rusal.

Rusal declined to comment.

Reporting by Polina Devitt; Editing by Mark Potter

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