April 11, 2018 / 6:33 AM / 5 months ago

MSCI may delete Sulzer from indexes amid new U.S. sanctions

MOSCOW, April 11 (Reuters) - The MSCI Inc, a provider of research-based indexes and analytics, said it may delete Sulzer from its MSCI Equity Indexes after the Swiss engineer’s largest shareholder, Renova Holdings, was included on the new U.S. sanctions list.

The MSCI, used by investors globally to decide on investment strategies, said it would not add the 14 firms on the list to the MSCI Equity Indexes until further notice.

“Additionally MSCI will delete from the MSCI Equity Indexes any securities of companies subject to the new sanctions under OFAC’s ‘50 percent rule’,” it said.

Renova Holdings and its Russian chairman, the oligarch Viktor Vekselberg, both feature on the list of U.S.-sanctioned individuals and entities issued by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC).

In a bid to avoid being hit by sanctions, Sulzer has agreed to buy five million of its own shares - or around 15 percent of its outstanding stock from Renova. After completion, Renova would be a 48.83 percent shareholder in the company, Sulzer has said.

Sulzer Chief Executive Greg Poux-Guillaume told Swiss newspaper Finanz und Wirtschaft in an interview on Wednesday he expected to be “freed” from U.S. sanctions within days.

The MSCI however said it was “uncertain at this time whether the company would still be subject to the sanctions following this transaction”.

Without clarity by April 16 the Swiss firm would be deleted by the close of April 18, it added.

Sulzer also could be deleted from the MSCI Global Small Cap Indexes.

The United States last week imposed fresh sanctions on seven Russian oligarchs, a number of officials and companies to punish Moscow for its alleged meddling in the 2016 U.S. election and other “malign activity.”

None of the 14 firms on the list were existing constituents of the MSCI Russia Indexes, the MSCI said.

Reporting by Karin Strohecker in LONDON Writing by Katya Golubkova; Editing by Stephen Coates

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