Metalloinvest lost $200 million on Norilsk Nickel shares in favor of Alisher Usmanov

In 2011, the holding company bought out almost 5% of shares from Usmanov, Skoch and Anisimov, and then sold them cheaper.
"Metalloinvest" sold the remainder of the stake in Norilsk Nickel - 1.79% - for $ 400 million, the iron ore holding said. "Metalloinvest" carried out the procedure of accelerated bookbuilding, organized by Deutsche Bank. The offering price assumes a discount of 4.5% to the LSE quotes before the transaction. The main shareholding was acquired by Deutsche Bank, a trader familiar with the terms of the deal said. Part of the shares of the organizer of bookbuilding sold to its foreign customers, some remained on the book.

 Whether any of the major shareholders of Norilsk Nickel (Interros, UC Rusal or Crispian) is planning to buy paper is unclear. Such a package can be easily sold on the market, a source close to one of the shareholders believes. The main shareholding was acquired by Deutsche Bank, a trader familiar with the terms of the deal said. The organizer of bookbuilding sold part of the shares to its foreign clients, he says.

The representative of Metalloinvest did not answer why the holding decided to sell the remaining shares of Norilsk Nickel.
Price difference

The owners of Metalloinvest - Alisher Usmanov, the family of the State Duma deputy Andrei Skoch and the owner of Coalco Vasily Anisimov (sold a stake in Metalloinvest in 2012) - acquired about 5% of Norilsk Nickel in the spring of 2008 for $ 2 billion. The businessmen wanted to build together With the main owner of the nickel company Vladimir Potanin "Russian BHP." But the partnership did not work out - a fierce corporate war broke out between Potanin and UC Rusal for operational control over Norilsk Nickel. And in 2011 iron ore holding bought out 4% of the company's shares from shareholders for $ 2.2 billion.

Metalloinvest began to gradually reduce its stake in Norilsk Nickel in 2011 - then he took part in the buyback of the shares, selling 0.4% for $ 234 million, but the holding's stake in Norilsk Nickel did not change, because in 2013 The nickel company repaid 17.04% of quasi-treasury shares. In 2014, Metallinvest sold a 1.8% stake in Norilsk Nickel for $ 588 million, in 2016 another 1.4% stake for $ 342 million. That is, the sale of shares of Norilsk Nickel brought Metallinvest $ 1.56 billion (including Today's deal). In addition, for eight years, Metalloinvest's share was about $ 460.4 million in dividends. It turns out, shares of Norilsk Nickel brought Metalloinvest 7.9% less than it paid for them. But Usmanov and his partners remained in the black.

Norilsk Nickel and Metalloinvest could not develop a joint long-term development strategy, explains a source in one of Norilsk Nickel's shareholders. "Usmanov would like to see Potanin and Norilsk Nickel as a partner in the development of Udokan. But "Norilsk Nickel" is more interested in another option - the Baimskoye deposit, the rights to develop it belong to another group of shareholders - Roman Abramovich and Alexander Abramov, "he said.

 The Baikal Mining Company, owned by shareholders of Metalloinvest, holds a license to one of the world's largest copper deposits - Udokanskoe in the Trans-Baikal Territory. Several years ago, Kommersant wrote that Usmanov suggested that Vladimir Potanin, managing partner of Norilsk Nickel, be exchanged for participation in Udokan with an additional 5% of Norilsk Nickel. It was not possible to reach an agreement. However, this spring Usmanov told Vedomosti that his Russian partner, Igor Altushkin, could become his partner in developing Udokan. "I have exhausted all proposals for him at the beginning of our love alliance for Norilsk Nickel," Usmanov explained to Vedomosti.

Potanin preferred cooperation with other shareholders of Norilsk Nickel - Roman Abramovich and Alexander Abramov, discusses with them the creation of a single project based on the Bystrinsky copper deposit in Transbaikalia and Baimskaya Square in Chukotka. This project is one of the most effective in the world. According to Goldman Sachs, the Baim project is the fourth in the world, its indicator is $ 3.7 billion according to the level of NPV (net present value). The indicators of other Russian projects are lower: Bystrinsky - $ 2 billion, Udokan - $ 1.1 billion.

For Norilsk Nickel, the package of Metalloinvest has been a "canopy" for many years, says Aton analyst Andrei Lobazov. "The exit of Metalloinvest from the shareholders should remove the risk of falling quotations for Norilsk Nickel, increase the liquidity of the company's shares and slightly increase the share in the MSCI index," he adds. It is unclear, in the analyst's opinion, why Metalloinvest decided to sell the package right now, because the paper traded weakly compared to the market. There is no urgent need for money from Metalloinvest: net debt is $ 3.16 billion, in 2017 it is necessary to return $ 100 million to banks. Among possible causes, Lobaz calls disappointment in the potential for growth in securities, the need for funds for new projects or preparation for an IPO.