Potanin comes out as CEO in Norilsk Nickel boardroom war deal – by Polina Devitt (Mineweb.com – December 17, 2012)


As the Norilsk Nickel boardroom war comes to a Kremlin/Abramovich–enforced understanding, long-time co-owner, Vladimir Potanin has emerged as the incoming CEO.

MOSCOW (REUTERS) – Norilsk Nickel named longtime co-owner Vladimir Potanin as its chief executive on Monday under a deal to end a boardroom war at the world’s top nickel and palladium producer.

Kremlin-backed oligarch Roman Abramovich will take control of a 20 percent voting stake to act as a buffer between Potanin and rival Oleg Deripaska, who owns a share in Norilsk through UC RUSAL, the world’s largest aluminium producer.

Speaking after his unanimous election by the Norilsk board, Potanin said he planned to stay in the job for between 18 months and two years. The peace deal will last for 10 years, with the core shareholders agreeing to keep their stakes for five.

Abramovich, the billionaire owner of Chelsea soccer club, could also act as a conduit for the Kremlin at the cash-rich company that mines the vast mineral deposits of Russia’s far north.

Having brought an end to the four-year feud between Potanin and Deripaska, he could potentially end up sidelining them as President Vladimir Putin seeks to restore order at the $30 billion miner that was privatised in the mid-1990s.

Deripaska and Potanin now lose their blocking voting stakes and Abramovich steps in with the ability to serve the president’s interests early in his new six-year term.

“Roman Abramovich is a businessman who wants to make money,” a well-connected industry insider said of the deal. “Norilsk Nickel is a cash machine that doesn’t need to fear a crisis.”

Alexander Abramov, Abramovich’s partner in Evraz, Russia’s largest steelmaker, is to become board chairman at Norilsk Nickel, a source said. Norilsk’s shareholders will elect a new board on March 11.

The company will pay around half of its core earnings, expressed as earnings before interest, depreciation and amortisation (EBITDA) in dividends over the next few years, said Potanin. It will start paying dividends twice-yearly in 2014.

Vladimir Strzhalkovsky, who like Putin served in the Soviet KGB security force, steps down as CEO – a demand by Deripaska that Potanin had resisted.

Sources close to the company’s shareholders said last week that Strzhalkovsky, who sided with Potanin and launched a series of buybacks during the dispute over Norilsk Nickel’s cash flows, would have a $100-million severance deal.


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