Home > Market change > Potanin backs Norilsk’s role in Rusal fight

Potanin backs Norilsk’s role in Rusal fight

May 9, 2011

“Vladimir Potanin, the Russian tycoon, has defended controversial actions by the management of Norilsk Nickel during his bitter battle for control of the mining company with rival Oleg Deripaska, insisting that they have protected shareholder value. In his most extensive comments since the conflict flared up again last year, Mr Potanin told the Financial Times that his Interros holding company and Norilsk’s managers were not acting together against Mr Deripaska’s Rusal.

The dispute became public after Rusal ended up with three board directors at last June’s annual shareholder vote, against Interros’s four. The aluminium group accuses Norilsk’s management of manipulating the vote in favour of Mr Potanin’s group.

Mr Potanin said tensions had simmered for six months before June’s shareholder meeting, after Rusal representatives on the board voted against Norilsk’s 2010 budget, demanding it should include big dividend payments.”

Source: Financial Times, May 8 2011

Observations:

  • Despite holding 25% of the ownership of Norilsk Nickel and being on the company’s board, mr. Deripaska has not managed to exert control over the miner. Although Potanin’s Interros does not hold a majority in the board, it can count on the support of Norilsk’s management to control the course of the company.
  • Board composition is depicted below:

Implications:

  • Rusal’s ally Metalloinvest, which holds 4% of Norilsk, is seeking to merge with the company. By trying to increase its share in the open market it could change the voting dynamics in future shareholder meetings to bring control over the company to Rusal’s side, enabling a friendly merger.
  • Deripaska has announced not to sell Rusal’s 25% stake, but Interros will try anything to ensure he will not gain control. One of the current actions of the company to prevent Rusal from gaining control is a share buyback program via Norilsk’s subsidiary Corbiere Holdings. Together with Metalloinvest’s attempts to increase its stake this creates strong demand for the company’s shares.

©2011 | Wilfred Visser | thebusinessofmining.com

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  1. Ousmane
    May 10, 2011 at 10:40 am

    Hello, how can i contact you ?

  2. May 10, 2011 at 11:51 am

    Just connect via LinkedIn > http://www.linkedin.com/in/wilfredvisser

  3. Ousmane
    May 10, 2011 at 12:13 pm

    I don’t have a likedin acount yet . I’m a student and my email is ousgodra@gmail.com
    Please

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