Co-owners of Russia's Nornickel back in fight for control

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Co-owners of Russia's Nornickel back in fight for control

Postby Matthew » Wed Oct 14, 2020 6:09 pm

A power struggle over Norilsk Nickel (Nornickel) GMKN.MM resurfaced on Friday as billionaire Vladimir Potanin offered to buy Roman Abramovich's stake in the mining group, and a third businessman - Oleg Deripaska - tried to block the deal.

The fight between the billionaires revives a long-running battle for control of Nornickel, a $33 billion mining company, which competes with Brazil's Vale SA VALE5.SA for the rank of the world's top nickel producer. It is also the world's largest palladium producer.

Deripaska and Potanin, who is Nornickel's largest shareholder, have periodically been at loggerheads since Deripaska's aluminum group Rusal 0486.HK bought a stake in Nornickel just before the 2008 global crash. Rusal currently owns 27.8 percent of Nornickel.

Chelsea soccer club owner Abramovich stepped up as a “white knight” minority shareholder, to act as a buffer between Potanin and Deripaska in 2012.

The peace deal involved a five-year lock-up period, during which they could not sell most of their Nornickel stakes. This ended in late 2017.

Potanin made an offer to purchase a stake in Nornickel from Abramovich and his partners, Potanin’s asset manager Interros Holding told Reuters on Friday.

Potanin also received a counteroffer to buy the stake from Abramovich and partners, in line with a Nornickel shareholder agreement, Interros also said. Interros did not disclose the size of the stakes involved in the offers.

Their agreement has a “right of first refusal”, which means that a shareholder who gets an offer for his stake should offer it to the other two participants of the agreement. It was not clear whether Abramovich also offered his stake to Rusal.

Abramovich and his partners hold 4.2 percent in Nornickel, via Сrispian, while their total stake is estimated at 6.3 percent. Potanin, also Nornickel’s chief executive, has 30.4 percent of Nornickel.

Rusal is now seeking an injunction in a London court to block the possible deal, Interros said. Interros also said it believed Rusal’s claim against the possible deal was unjustified.

Stephen Phillips, the judge hearing the case in the London court, said on Friday he would allow parties involved to delay the injunction hearing until the week of March 5. The parties in the case also asked the court for a trial before June.

A lawyer for a firm controlled by Potanin told the court that financing for the potential purchase of the Nornickel stake from Abramovich was already in place.

Rusal and Nornickel declined to comment. A representative of Abramovich also declined to comment. Read more at
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