The Tajik government intends to purchase the Sozidaniye Business Center and the Hyatt Regency Hotel that are located in Dushanbe from Russian aluminum giant, United Company Russian Aluminum (Rusal).
The sides have reached an agreement and the Tajik Aluminum Company (TALCO) will pay Rusal around $150 million over a 10-year period.
Meanwhile, a source familiar with the deal has reported that the foreign staff managing both facilities will leave the country, leaving Tajik personnel to take over.
Talks about the transfer of property had reportedly been going on for some time and likely turned a final corner in late December, when Rusal chief executive Vladislav Solovyov traveled to Dushanbe.
The transaction appears to put a definitive end to the long-standing row between Tajikistan and Rusal, which is owned by Russian billionaire Oleg Deripaska.
Relationship between Rusal and the Tajik aluminum smelter stretches back to the 1990s, interweaving the two enterprises’ commercial interests.
The dispute began after a 2004 management change at the Tajik aluminum plant. TALCO still says the previous management stole hundreds of millions of dollars. The two parties settled out of court, with legal fees reportedly totaling over $100 million.
The relationship was bolstered by a 2004 promise from Russian president Vladimir Putin who pledged $2 billion in investment to Tajikistan, much of it ostensibly to build the Roghun hydroelectric power plant (HPP). Kremlin-friendly Rusal was tapped to be effectively in charge of construction; in exchange, it was supposed to get a controlling interest in the aluminum plant.
In October 2004, Tajikistan signed an agreement with Rusal, according to which Rusal agreed to complete the Roghun facility and rebuild the Tursunzoda aluminum smelter. In August 2007, Tajikistan formally revoked a contract with Rusal, accusing it of failing to fulfill the contract.
After Rusal pulled out of Tajikistan in 2007, its subsidiaries Hamer Investing Ltd and Aluminum and Bauxite Company (Albaco) began arbitration in Switzerland, culminating in October 2013 with two wins. A Swiss tribunal ordered TALCO to pay Hamer $275 million related to broken supply contracts dating back 10 years. Later, a court in the British Virgin Islands held up an older Swiss award for $70 million to Albaco.
TALCO has rejected the foreign court rulings, insisting the cases be heard in a Tajik court. The company has said it has documentary evidence proving Rusal was using criminal schemes to bankrupt the Tajik plant and thereby eliminate a competitor. Rusal has dismissed the accusations, pointing out that the Swiss tribunal rejected TALCO’s $400 million counterclaim.
At the beginning of the last year, the Tajik government obligated TALCO to conclude an amicable agreement with Rusal’s subsidiaries. (News.tj/Ukrainian metal)