UC Rusal has warned of potential technical default in relations to certain credit obligations of the group in the announcement published on Hong Kong stock exchange.
The Company assesses that the OFAC Sanctions may result in technical defaults in
relation to certain credit obligations of the Group, and the Company is currently
evaluating the impact (if any) of such technical defaults on the financial position of
Company’s initial assessment is that it is highly likely that the impact may be materially adverse to the business and prospects of the Group
Shares in Rusal, one of the world’s largest aluminum producers, fell to HK$2.70 in late morning trade, its lowest since October 2016. That compared with 1.76 percent rise in the benchmark Hang Seng index.
“Investors were rushing to square their position or doing what they need to do with their exposure to the stock and to those shares which are sanction and trade war sensitive,” said Steven Leung, a sales director at UOB Kay Hian.
A Hong Kong-based equity sales director said on Monday the stock prices are under pressure because the sanctions require investors subject to U.S. jurisdiction to ditch the stocks within a month.
The U.S. Treasury Department said investors have until May 7 “to divest or transfer debt, equity, or other holdings” in EN+, Rusal and Russian vehicle maker GAZ