Norilsk Ark: how Vladimir Potanin became the richest man in Russia

Norilsk Nickel, which was in dire straits a few years ago because of the corporate conflict, has made its CEO the leader of the Forbes list.
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"The history of our conflict with Oleg Deripaska is very revealing. It can be directly used for the textbook - with a smile says president of the holding "Interros" and the current CEO of MMC "Norilsk Nickel" Vladimir Potanin, sitting in the office of "Interros" on Yakimanka with views of the Kremlin. - Those who are in conflict, in the business do not earn. Earn those who know how to negotiate. "

In 2015, Vladimir Potanin became the richest Russian businessman. The basis of his status - "Norilsk Nickel", capitalization for the year grew by 15% in dollar terms. This is against the backdrop of the fall of the value of the vast majority of Russian companies.

Now, according to the company's employees, Potanin rarely appears on Yakimanka. But a few years ago, when between the "Interros" and UC Rusal Oleg Deripaska was the so-called war of nickel, it is with Yakimanka Potanin followed the course of the fighting, and tried to keep control of the MMC.

Confrontation between the two billionaires began in 2007, when long-term partners for the "Interros" Vladimir Potanin and Mikhail Prokhorov, 10,jointly owned "Norilsk Nickel" and other assets of the holding, announced the division of property. But the "divorce" without conflict, they could not. Potanin offered to buy Prokhorov's stake in "Norilsk Nickel" at a discount, Prokhorov refused and demanded justice, in his opinion, the price is 25% higher. There are no documented commitment to each other they did not have: in the 1990s, when they started the business together, everything was decided "on concepts." As a result, the partners quarreled. Everyone was trying to come up with a "divorce" scheme, taking into account their interests. Potanin, has agreed to merge with "Metalloinvest" Alisher Usmanov 3. As a result of the alliance was to be metallurgical giant unprecedented dimensions. To confirm the seriousness of intentions, Usmanov bought on the market for about 5% of shares "Norilsk Nickel".

Potanin until recently did not believe that the partner will be able to sell his shares to anyone except him, because he believed that no one will collect the necessary sum and will not receive approval for the deal in the Kremlin. But Prokhorov managed. He found a partner in the person of Oleg Deripaska and the spring of 2008 over 25% of "Norilsk Nickel"I received from him and the $ 5 billion stake in UC Rusal.

The next five years, the participants of "nickel-war" recalled reluctantly: numerous lawsuits around the world, impartial public statements and the struggle for control of the company. Each side of the conflict had its own reasons for aggressive behavior. For Potanin "Norilsk Nickel" has been and remains the foundation of the state. Deripaska, who made a 2007 out of UC Rusal's largest aluminum producer in the world with revenues of $ 14.3 billion, wanted to achieve even greater success, and at the same time at the expense of dividends, "Norilsk Nickel" to resolve problems with creditors that arose after the 2008 financial crisis. "Oleg how the motorcyclist who rides in the circus on the walls: to move out down can not, and it is just all the time to press on the gas until the gas is not going to end," - explained to Forbes in 2008, one of Deripaska's friends.

By 2012 the struggle tired billionaires. On the horizon loomed the forced reconciliation government forces, which did not suit anyone. "We have been brewing the understanding that resolution of the conflict, we open the way to a positive, as it destroys the conservationost of the company ", - says Potanin. Parties several times sat at the negotiating table, but every time something prevented them shake hands. One of the participants in these failed attempts considers that the parties and the mediators for a long time it was impossible to come up with a psychologically comfortable configuration of the world in which no one would have felt like a loser. Reconciled "Interros" Rusal tried to Usmanov, several high-ranking officials from the government and the head of Sberbank German Gref, but managed only a test Deripaska Valentin Yumashev and billionaire and co-owner of "Eurasia" Roman Abramovich 12.

In autumn 2012 Yumashev called Potanin and gently asked how he relates to Abramovich as a peacemaker and a potential minority shareholder "Norilsk Nickel". Potanin said he did not feel the discomfort of such an idea.

Several days later, Abramovich and Potanin met visiting Valentin Yumashev and his wife, Tatiana, Boris Yeltsin's daughter.

Abramovich asked a few questions about a possible reconciliation and their participation in it. Potanin told him about their interests and explainl, which is not opposed to equity participation of several partners, but I would like to personally deal with the operational management of the company. His answer seems to accept Abramovich.

Why it was necessary to the former oil tycoon, distanced himself from the Russian business and moved to the UK? "Abramovich has a reputation, which, in spite of everything, with all good relations - said one of his friends. - For it to ensure peace between two such stubborn as Potanin and Deripaska, was, first, the prestige. And secondly, Abramovich is not devoid of pragmatism. He knew that such an asset as "Norilsk Nickel", can bring good dividends. "

The next time Yumasheva took three guests: Potanin, Abramovich and Deripaska. Already during the first joint meeting Abramovich and Yumashev managed to break the deadlock. "Yumasheva House - a safe haven. He has to talk peace. We came and had tea with honey and jam, discussed the details of the agreement, and already during the first meeting we went out a purely human conversation with Olegom, that I suddenly realized that we will reach an agreement, we can put the squeeze on the situation, to bring it to a logical conclusion ", - says Potanin.

Discussion of the settlement agreement took several months parts. The negotiation process was not always smooth, but rescued Yumashev and Abramovich: they managed to find a compromise which suited and "Interros" and Rusal. Peacemakers showed Olympian calm and whenever suddenly flashed a spark between Potanin and Deripaska, separately talked with those who have expressed distrust. "They watched us and did not allow to escape into something constructive. It's like in sports. You play for the team? So show the best game, show that you are normal. It was the only way to reach some positive, and it worked. Yumashev and Abramovich has shown great patience, "- said Potanin.

"Roman interrupted our conversation only in one case - when Chelsea played - laughing, says billionaire. - Excuse me, I say I'm here in the next room and match look back. "

As a result of many hours of discussion began to emergeXia configuration of the future, "Norilsk Nickel" and its shareholders. Firstly, the parties agreed that since the signing of the agreement do not have each other claims. Secondly, the "Norilsk Nickel" was replaced by CEO. Instead Vladimir Strzhalkovsky with which Oleg Deripaska could not find a common language, management of the company was handed over personally to Potanin, who insisted on it. "Potanin important to be not just a businessman, as a managing partner. Then his name is not only Putin's meeting, the government and big business, but when going to the company. Here Abramovich is not. He only meeting with big business goes, and it is enough. But Potanin's important to be well received, "- says this condition a person familiar with the shareholders of" Norilsk Nickel ".

Third, the participants in the few years of the agreement agreed on in advance, "Norilsk Nickel" dividends. The last point was important for everyone, but especially for Deripaska. If the "Interros" debt at the end of 2012 amounted to $ 3 billion in "Evraz" Abramovich - $ 6 billion, then Rusal approaching $ 11 billion was in the interests of Mr Deripaska to.they say that the dividend in the first three years were the highest. Sources told Forbes that he had asked to pay at least $ 10 billion before the end of 2015. Potanin, who took the case to the company after five years of war, on the contrary, sought to minimize the costs and offered to pay about $ 8 billion. As a result, agreed to $ 9 billion, and the following condition. If the situation on the metals market will not deteriorate, "Norilsk Nickel" is obliged to pay shareholders $ 8 billion in the first three years from the date of the agreement plus $ 1 billion from the sale of non-core assets, and continue to pay annually at least 50% EBITDA of the company. If metal prices will decline, the company reserves the right to revise the procedure
payment of dividends, adjusting it to the shareholders.

Shares in the company were divided so. "Interros" and Rusal sold to Roman Abramovich and his partner in "Eurasia" Alexander Abramov 22 5.87% stake for $ 1.87 billion. At the same time, "Norilsk Nickel" quasi repaid 17% of the shares issued by MMC during the "War of the nickel." As a result, the biggest package (30.3%) remained at the «Interros», Rusal retained with27.82% stake in the battle. In addition to the Fund Crispian Abramovich and Abramov's company was one minority shareholder - "Metalloinvest" Alisher Usmanov. Neither Usmanov nor his representatives have not participated in the negotiations.

As says businessman familiar with the situation, Alisher Usmanov, a few years does not deal with Potanin, holding it hurt after the "Interros" changed his mind combined with "Metalloinvest".

In 2014, the company reduced the share of "Norilsk Nickel" from 5% to 3.5%, having received from the sale of $ 490 million. The representatives of "Metalloinvest" Forbes did not respond to requests for comment in the MMC.

To someone from the shareholders again began to "nickel war", the two sides have developed a system of checks and balances, conflict makes it unprofitable for the initiator. First, in the "Norilsk Nickel" was introduced the institution of financial controllers. "It's two auditors, who are appointed by Deripaska and Abramovich and monitor the execution of the contract conditions. Formally, they are working in the company and I obey, but I can not fire them, "- Potanin explains. In addition, during the five years since it was signedof shareholders agreement pledged not to change the size of their stakes in the capital of "Norilsk Nickel" below established limits (for the "Interros" and Rusal is - 20%, to fund Abramov and Roman Abramovich - 2.5%). After 2017 any of the three shareholders wishing to sell their shares, may start the mechanism of the so-called Russian roulette. He must offer them to other participants in the agreement with a 20% premium to the weighted average market price for the last 6 months. In turn, the other shareholders can accept the offer or to put forward counter at the same price or with a higher premium. For failure to comply with the conditions of Russian roulette is a penalty - the sale of 1.87% of shares "Norilsk Nickel" for $ 1.

The whole package Fund Abramovich Abramov and 7% of the shares of "Interros" and Rusal agreed to make a special account in the agent bank. If one of the shareholders have grossly violated the terms of the agreement, his account will be charged 1.875% of the shares in favor of other participants. The decision as to whether the condition is violated grossly, will accept the arbitral tribunal of the British lawyers. They are also entrusted with the consideration of the conflicts in which two shareholders and prejudicenteresy third. In this situation the victim may be entitled to redeem the entire package of offenders, which is in the bank-agent at a discount of 25% to the market price. Concord violated the terms of the contract the parties when this is required. If one of the shareholders will refuse to comply with the arbitral award, the agreement is deemed terminated. The partners have agreed that their disputes in this case will be dealt with in the High Court of Great Britain.

But only if the previous war was the reason for the detailed study of the shareholders' agreement? "Potanin does not trust, especially Oleg [Deripaska] - says a former member of the board of directors of" Norilsk Nickel ". - Potanin always interpret ambiguous situations in business in their favor. This was the case with Usmanov, who himself Potanin persuaded to buy shares at the peak, and then ... well, let's say, have lost interest in the partner who has fulfilled its obligations ... "

Potanin said that several times personally read from cover to cover 86 pages of the settlement agreement, together with all the additional applications and spreadsheets, hOba not to miss some pitfalls and "forget about the problems between the partners forever." But it seems that no pitfalls or they are too deeply hidden. For two and a half years have passed since the signing of the agreement, any conflict between the co-owners of "Norilsk Nickel" has not arisen.