Deripaska Plans Auto Stake Sale to Lift Sanctions

Russian billionaire Oleg Deripaska is discussing selling part of his automotive business to minority investors, including former Magna International Inc. chief Siegfried Wolf, as part of a plan to end sanctions on the company.

Deripaska is in talks with Wolf, whom he has known for more than a decade, about selling a portion of his stake in Russian Machines Corp., which owns GAZ Group, Russia’s largest commercial carmaker, according to three people familiar with the matter, who asked not to be identified because the talks aren’t public. The talks are ongoing and no decision has been made.

Photographer: Simon Dawson/Bloomberg

Deripaska hopes the deal would show that he’s willing to give up some ownership in exchange for the U.S. lifting sanctions, they said. The deal would depend on the Treasury’s Office of Foreign Assets Control agreeing to remove sanctions on Russian Machines and GAZ, the people said.

If successful, it would show a clear path for Deripaska’s other companies, such as United Co. Rusal and En+ Group Plc, to escape sanctions. Rusal, Russia’s largest aluminum company, is fighting for survival and has even had trouble paying employees after being effectively blacklisted from the Western financial system.

Control Question

Last week, the Treasury said it may lift sanctions on GAZ and related companies if Deripaska gives up control. Through Russian Machines, he owns about 80 percent of GAZ, which has a joint venture with Volkswagen AG and assembles cars for Daimler AG in Russia.

A spokeswoman for Deripaska declined to comment, as did a representative for Wolf’s office in Vienna.

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The Treasury has indicated it may allow Deripaska to keep his ownership of En+ — the holding company by which he owns Rusal — in the range of mid-40 percent under a deal that would spare the company from sanctions, a person familiar with the matter said this week. Deripaska currently owns about 66 percent of the company.

The sanctions, which were announced in April, took aim at Russian tycoons with ties to President Vladimir Putin and were made as retribution for the Ukraine crisis and the Kremlin’s alleged meddling in the 2016 presidential election.

In 2010, Austrian-born Wolf quit Magna after 16 years and joined the boards of Russian Machines, GAZ and Glavstroy Corp., a construction and development company. Wolf, 60, became a minority shareholder in those businesses in 2012. He was on the Rusal board until April, and is still GAZ’s chairman.

Deripaska’s Russian Machines briefly owned a stake in Magna. He bought a holding in 2007, but had to cede it to lenders a year later during the global financial crisis.

Wolf has other Russian connections too. In 2009, Magna bid for General Motors’ Opel plants in a deal that included a partnership with Russia’s biggest state lender Sberbank PJSC. Since than, Wolf has been on friendly terms with Sberbank management and is currently chairman of the supervisory board at Sberbank Europe AG.


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