Russia's Sanctioned Companies Seek $1.6 Billion in State Support

(Bloomberg) -- Russian companies hit by the latest round of U.S. sanctions asked the government for about 100 billion rubles ($1.6 billion) in support, according to the country’s top finance official.

The government is creating a department within a ministry that will liaise with the sanctioned businesses, study their challenges and draft government proposals, Finance Minister Anton Siluanov told reporters Friday. One of the potential steps, besides providing liquidity, could be “a temporary nationalization” for “a symbolic price” to support employees, though aluminum giant United Co. Rusal is not on the list to be nationalized, he said. Siluanov also ruled out state purchases of aluminum or capital injections.

U.S. sanctions on April 6 against Russian oligarch investors and companies erased billions in stock value from firms including Rusal and EN+ Group Plc, weakening the ruble and prompting a debt selloff. Officials are trying to ease the blow of the sanctions on the economy, as the restrictions threaten corporate growth and jobs.

Among those sanctioned by the U.S. was Oleg Deripaska, owner of Rusal, the largest aluminum producer outside of China, and Viktor Vekselberg and his conglomerate Renova Group.

Providing Liquidity

Promsvyazbank, a leading private lender that is being nationalized, could play a role in providing liquidity to sanctioned companies, Siluanov said from Washington, where he’s attending meetings of the International Monetary Fund. The government could also help with state purchases of the companies’ products, such as buses, he added.

Speaking earlier Friday on CNBC television, the minister indicated Russia isn’t interested in a tit-for-tat sanctions battle, though it will defend itself and protect the economy.

Russian lawmakers have drafted proposals that would allow the country to restrict imports from the U.S. and other nations. It’s unclear whether the legislation will become law.

©2018 Bloomberg L.P.