AnAn Group has agreed to take up a third of the US$1.5 billion initial public offering by Russian oligarch Oleg Deripaska’s commodities and energy major EN+ Group. The deal by the parent of AnAn International, and a sister company to CEFC China Energy, is another sign of closer economic partnership between China and Russia, even as Moscow has become the focus of western sanctions following its annexation of Crimea from Ukraine in 2014. AnAn Group has committed to subscribe to US$500 million worth of EN+ shares that will be listed in Moscow and London, EN+ said in a statement. “AnAn Group’s participation in the offering as a cornerstone investor is a clear testament to the strength of our investment case ... and the potential for greater cooperation between our two companies going forward,” EN+ chief executive Maxim Sokov said. EN+, the parent of Moscow and Hong Kong-listed Rusal, the world’s second largest aluminium producer, also own a large portfolio of hydro electricity plants, coal and base metal mining assets in Siberia. EN+ and controlling shareholder Deripaska are not subjected to the international sanctions, which ban western companies from helping Russian companies financially or by the transference of technology. The vast majority of CEFC’s funding came from state policy financier China Development Bank. Almost a month ago, CEFC agreed to buy 14.16 per cent of state-controlled Rosneft – the world’s largest listed oil firm by output that produces 40 per cent of Russia’s oil – in a deal also heavily financed by the bank. “The Rosneft and EN+ deals are likely linked as a package ... it is a good opportunity for China to step up its involvement in and ownership of Russian natural resources,” said Stephen O’Sullivan, the chief executive of TS Lombard Research Partners, who also leads emerging market energy research at the investment research firm. “Russia is now one of the most overweighted countries in investors’ portfolios because it offers value.” Moscow’s MICEX index that track 50 stocks has a price to earnings multiple of 7.5, much lower than the Hang Seng Index’s 14.1 times and a fraction the 21.6 multiple of the New York Stock Exchange Composite. AnAn Group, formerly known as CEFC International, changed its name in August. It is not known how AnAn Group, which owns 63.8 per cent of AnAn International, will finance the EN+ shares purchase. AnAn International had US$36.4 million of cash at the end of June and a net borrowings to shareholders’ equity ratio of 20.9 per cent. It posted a 85 per cent plunge in net profit last year to US$2.7 million due to poor derivative contracts trading results, even as revenue jumped 111 per cent to US$999.5 million.