ECONOMY

Osborne’s Tory ties help win advisory role for Deripaska-backed EN+

Financial services updates

Former UK chancellor George Osborne has won one of his first mandates since reinventing himself as an investment banker, securing his new employer a role advising a major mining group founded by Russian oligarch Oleg Deripaska, according to people familiar with the matter.

Robey Warshaw, the corporate advisory firm Osborne joined in April, is helping London-listed EN+’s subsidiary Rusal negotiate several matters with Norilsk Nickel, the world’s largest nickel producer, which counts Russian billionaire Vladimir Potanin as its controlling shareholder.

Osborne, the UK chancellor in David Cameron’s government from 2010 to 2016, helped win the business in part thanks to his relationship with Greg Barker, the chair of EN+, the people said. Barker served as a minister in Cameron’s coalition government, where he was a political ally of Osborne.

Despite no background in banking, Osborne gave up much of an expansive portfolio of jobs accumulated since leaving politics, including editing London’s Evening Standard newspaper and a spell at investment manager BlackRock, to join Robey Warshaw as a partner. 

The boutique advisory firm was founded by former Morgan Stanley banker Simon Robey and former UBS banker Simon Warshaw in 2013. With just three partners before Osborne joined and a handful of staff, Robey Warshaw has made £207m in profits over the past seven years advising on some of the UK’s biggest corporate deals. 

When Osborne joined, Robey Warshaw said the former chancellor’s career and network built in politics would enhance the advice it gave to clients. However, others in the advisory industry warned the decision would invite more scrutiny of a firm that has kept a low profile. 

Listed in London in 2017, EN+ has a controlling stake in Hong Kong-listed Rusal, the biggest aluminium producer outside of China and also owns Russian hydropower assets. 

Barker, who stepped down as an MP in 2015 and was made a peer, became non-executive chair of EN+ just before the company’s London listing in 2017. Now, as executive chair, he is overseeing a restructuring of Rusal that will see its most polluting assets spun off into a new company listed in Moscow.

In 2018, the US imposed sanctions on EN+ and Rusal, which Deripaska controlled at the time, over the oligarch’s ties to the Russian government, sparking turmoil on global aluminium markets.

Deripaska relinquished control of EN+ and Rusal in 2019 in a deal brokered by Barker in exchange for the US lifting sanctions on the two companies. Deripaska remains a “specially designated national” by the US and retains a 44.95 per cent stake in EN+, though his voting rights are capped at 35 per cent.

For his role in brokering the deal, Barker received a “discretionary bonus” of $5.9m from EN+. Osborne said in 2008 he had met the Russian oligarch on five occasions, including four times during a weekend at a Greek island. 

Rusal, which owns 27.8 per cent of Norilsk, and Interros, which is controlled by Potanin and owns 30 per cent, have long been uneasy bedfellows. Interros acts as managing partner and Potanin serves as chief executive of Norilsk as part of a 2012 agreement between the two main investors.

Robey Warshaw, EN+, Interros and Norilsk Nickel all declined to comment.

Rusal is trying to reach new agreements on Norilsk’s dividend policy as well as management, environmental, social and governance issues, according to two people familiar with the talks. A current agreement between the major shareholders expires at the end of 2022.

The large dividends paid by Norilsk are a key source of income for the heavily indebted Rusal.

One of the world’s most profitable mining companies, Norlisk has been beset by a series of disputes over alleged mismanagement and a recent string of ecological disasters that earned Potanin a public dressing-down from Russia’s president Vladimir Putin last year.

Additional reporting by Nastassia Astrasheuskaya in Moscow

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