From staff and wire reports
LOUISVILLE, Ky. - Braidy Industries says it has about four months to raise $300 million in equity capital for a proposed aluminum mill in Kentucky or risk losing a large investment.
The Courier Journal reports Braidy provided the details in a U.S. Securities and Exchange Commission filing this week about its agreement with United Co. Rusal. The Russian aluminum company has ties to Russian oligarch Oleg Deripaska.
Rusal had been under U.S. sanctions until earlier this year. It recently announced plans to invest $200 million in Braidy's planned $1.7 billion mill near Ashland.
According to Braidy's SEC filing, a Rusal subsidiary on July 5 reached definitive agreements to invest $200 million in phases. The filing says the subsidiary can suspend or terminate its obligation if Braidy fails to secure its own $300 million contribution after four months have passed.
The company says the project will create 1,500 construction jobs and more than 650 full-time jobs once the plant starts production in 2021. Additionally, a report by Old Dominion University published earlier this year says the aluminum rolling mill could help generate $2.8 billion in estimated economic growth in Kentucky from now until its planned first year of production, including 3,600 additional jobs in the surrounding communities.
The company has already reported spending around $16 million on construction so far.
The plan is not without controversy, particularly surrounding the involvement of Deripaska, once Russia's wealthiest individual and a well-known confidant of Russian president Vladimir Putin.
In May, a group of Democratic lawmakers wrote to the U.S. Treasury Department, asking it to look into the $200 million investment from Rusal, a Russian aluminum company that, until January, was under federal sanctions for what the Treasury Department called the "worldwide malign activities" of the company's primary owner, Deripaska. Also sanctioned was En+, Rusal's holding company.
According to previously published reports, sanctions were removed when Deripaska stepped down, but lawmakers worry the Russian government may still be involved and may be using the Kentucky investment to curry political favor. Deripaska's shares in En+ largely went to the VTB Bank, a Russian firm that lawmakers said has been referred to as "Putin's piggy bank."
The lawmakers wrote that they were "deeply alarmed" to learn about the investment.