United Company Rusal, the aluminium giant in effect controlled by Russian oligarch Oleg Deripaska, has called in the London office of investment bank Rothschild to restructure its $14bn (£9.5bn) debt burden.
Mr Deripaska made headline news last year after shadow Chancellor George Osborne was accused of soliciting a £50,000 donation from him, in a way that could have breached parliamentary guidelines. Nathaniel Rothschild, who was caught in the middle of the affair, is the son of Jacob, who split from the bank that his family founded, after a row in the 1980s.
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A senior mining banker said: “There is some speculation that there are some covenant problems at Rusal. Rothschild was hired around the Christmas holiday period.”
Rusal is part of a plan put by Russian tycoons to the Kremlin to consolidate three mining giants to create a national champion. According to reports on Friday, Rusal would be merged with Norilsk Nickel – in which it already owns a stake of over 25 per cent – and iron ore group OAO Metallo-invest. The group would have a combined turnover of more than $40bn.