A shoot out is looming in Russian metals. That isn’t a reference to the industry’s blood-soaked history, but to a clause in a hard-won peace deal between two billionaire shareholders of MMC Norilsk Nickel PJSC, Russia’s largest miner.
The 2012 agreement between Oleg Deripaska’s United Co. Rusal and Vladimir Potanin’s Interros Holding Co. provides a mechanism by which one man can buy out the other’s stake in Nornickel. That mechanism is called a “shoot out,” and becomes possible after a five-year lock-up period expires on Dec. 10, according to a Rusal letter to shareholders published in 2014.
Potanin, one of Russia’s richest men with an $18 billion fortune, told Bloomberg he has no immediate plans to initiate the so-called shoot out — a forced auction where the loser must sell his stake to the winner.
“The instrument of the shoot out was designed for a dead-end situation,” he said in an interview. “It’s not a proactive measure.”
In fact there are discussions to extend the peace deal, which is due to expire in 2022, for a further five years, according to Potanin, who is also Nornickel’s chief executive.
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