Norilsk Nickel: At War with Itself – by Matthew Turner (Market Mogul – February 28, 2018)

Market Mogul

A long-standing spat between Rusal owner Oleg Deripaska and fellow metals magnate Vladimir Potanin over the ownership of nickel producer Norilsk, one of the world’s largest miners of nickel and palladium, is going into the next round.

Aluminium producer Rusal, which owns a 27.8% stake in Norilsk, has announced its readiness for a “shoot out” auction to determine whether it takes full control of Norilsk. The market is holding its breath as the conflicting parties are desperately searching for a resolution.

The latest chapter in this long-running corporate saga began when Potanin’s holding company Interros, which owns 30.4% shares in the company, made a move to acquire the 6.5% stake held by Roman Abramovich – shares that entered into Abramovich’s possession in 2012 as part of a “peace agreement” between Deripaska and Potanin to take the heat out of the tensions in the company.

Abramovich’s minority stake prevented both businessmen from owning a controlling share of Norilsk, and as part of the deal, both were barred from increasing their ownership for a period of five years.

The truce worked, but now that the moratorium has lapsed, Abramovich’s desire to sell his stake has led to the attorneys for Deripaska, Potanin and Abramovich facing off in a London court. The one point they all agree on is that this issue needs to be resolved soon because it comes at an inopportune time for the company, which has been performing well due to growing demand for its main product.

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