Original of this material appeared on FT.com website.
By Courtney Weaver and Charles Clover in Moscow
After years of vicious shareholder infighting, lawsuits and mudslinging, Norilsk Nickel’s oligarch shareholders are scrambling to overhaul its investment strategy and management structure following the steep fall in metals prices.
In an interview, Vladimir Potanin, Norilsk Nickel’s single biggest shareholder with 30 per cent and chief executive, said the company had hired western consultants including McKinsey and BCG to advise the nickel, platinum and palladium producer, which has a market capitalisation of $20.6bn.
UC Rusal plans to direct dividends from its 25% stake in MMC Norilsk Nickel to pay off company’s debt, said CEO of the aluminum company Oleg Deripaska, in an interviewto Russian TV channel.
"We are one of the shareholders of Norilsk Nickel, and we do have obligations to the banks. Virtually all funds will go to pay off our old bank loans", said Deripaska. According to 9m2012 IFRS report, net debt of Rusal decreased by 3.1% to $10.710 billion from $11.049 billion at the end of 2011.
Russian President Vladimir Putin said he hoped a long-running shareholder conflict at Norilsk Nickel, the world's largest nickel and palladium miner, would soon be resolved, signaling a possible new round of talks between its owners.
Putin gave no indication on Monday, however, of how billionaire shareholders Vladimir Potanin and Oleg Deripaska might end a battle for control of Norilsk, which has drained cash out of the business and sapped long-term investment.
The conflict between UC Rusal and Interros over the influence in the Norilsk Nickel has softened. Recently, the parties have found understanding on issues of investment and management of NorNickel’s treasury shares. At the last meeting of shareholders which passed this Friday, Rusal with the help of Interros put five of his candidates into the board. The owners of Norilsk Nickel were forced to make up due to the deteriorating situation on the market.
Today, Norilsk Nickel’s Board of Directors should approve the list of candidates to fill the new Board, writes Russian newspaper Vedomosti. The list of nominees will be submitted for the elections on company’s AGM this summer. Norilsk Nickel’s board have 13 seats, which according to the shares ownership and previously reached agreements distributed in the following way: Interros - 4 seats, UC Rusal, 2 seats, Independent Directors - 5 seats, Norilsk Nickel - 1 seat, Trafigura - 1 seat.
UC Rusal, according to the Russian media, has proposed 8 candidates to the new board. The list includes four acting directors of the board — Oleg Deripaska, co-owner and general director of UC Rusal, his deputy in Rusal, Maxim Sokov, former head of Presidential administration Alexander Voloshin and chairman of the BoD of Metalloinvest, Farhad Moshiri.
Oleg Deripaska Loses Another Partner — Viktor Vekselberg Quits From Rusal Opposing Its Aggressive And Hostile Business Model
Russian aluminium giant UC Rusal has faced another punch in the face, this time from one of its shareholders — Viktor Vekselberg, who has been partnering Oleg Deripaska in the aluminium business through his SUAL Partners, which holds 15,8% of Rusal for the benifit of Vekselberg and his partner Leonard Blavatnik, publicly resigned from the position of Chairman of the Board of the aluminium company.
Russian media reported, that in the letter to Rusal’s board members Vekselberg has aggressively criticized business model of Rusal, accusing Deripaska of running the company into a huge debt, being ineffective during a crisis times, and personally responsible for drawing Rusal into a huge amount of litigations and social conflicts.
Oleg Deripaska May Be Banned From Europe If Connection Between UC Rusal And Hyposwiss Theft Will Be Proved
International newswires reported that Swiss police have arrested a man for trying to sell confidential client data from Hyposwiss Private Bank, as it was confirmed by Switzerland's prosecutor on Wednesday, Feb. 29.
The prosecutor said the unnamed individual, formerly employed by a firm that provided services to Hyposwiss, had approached a law firm with the data, and remains in custody after his Feb. 16 arrest.
Swiss court still to review Rusal’s complaint which it has filed against The Federal Criminal Court of Switzerland who has turned down its earlier claim with allegations addressed to Norilsk Nickel’s recently held $4.5 billion buy-back procedure and a 8.1% shares sale to the international trading house Trafigura which happened almost a year ago. Rusal calculated its losses from Interros actions at more than $1 billion and named former board member of Hyposwiss Private Bank Zurich Hans Bodmer for his alleged role in the laundering scheme.
Russian nickel and palladium giant MMC Norilsk Nickel is still in the centre of the feud between Russian oligarchs Vladimir Potanin and Oleg Deripaska, who bought out the stake of Potanin’s ex-partner Michael Prokhorov and ran into serious disagreement over how to run nickel combine with Potanin from the beginning of their partnership.
While Prokhorov is making his new path as the politician balloting for the president chair in the competition on the upcoming elections with country’s Prime minister Vladimir Putin, Oleg Deripaska still tries to diminish or even destroy his Norilsk partner Vladimir Potanin. Now Deripaska uses Swiss courts where he publicly accuses Potanin in money laundering, using trustful Swiss press to transmit and spread his message in the way we have already described before.
In April, 2008 UC Rusal has bought into Norilsk Nickel when Oleg Deripaska has agreed with Michael Prokhorov, ex-parter of Vladimir Potanin in this company, about the purchase of 25% stake. Deripaska had something in mind when he was buying into this Russian metallurgical giant, but was that a thought about mutual management of this company with Interros?
Since 2008, relations between the two shareholders had started to chill out, they found controversies which had later turned into open confrontation and disagreement on almost all significant topics. In the beginning of the conflict UC Rusal has put some effort into settling the differences, but 2010 and 2011 was spent by Oleg Deripaska in the attempts to put all kinds of pressure on Vladimir Potanin. Deripaska has appealed to Krasnoyarsk administration, President Medvedev, Federal prosecutors and financial regulators of the country. After Deripaska has failed in his attempt to sabotage Interros and management of Norilsk Nickel domestically he has engaged his international legal-fighting machine to question and revoke every single operation Norilsk Nickel has implemented.
Russian aluminum producer UC Rusal goes flop in its plan to use international judicial machine as an instrument of influence in its fight over Norilsk Nickel. UC Rusal has recently lost control over Norilsk Nickel’s board and later on has boycotted the board altogether. Unwilling to sell it’s stake in Norilsk Nickel and being unable to gain control over the company’s board, Oleg Deripaska has decided to throw all forces to legally refute all decisions made by Norilsk Nickel’s management, including the sale of 8.1% of shares to to Dutch trader Trafigura completed last year. Unfortunately for Mr. Deripaska international courts are not so easy to crack, he completely failed in all of his attempts to persuade court officials to follow his leads.
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